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Richly Valued Small Caps Could See Rough Times Ahead
I monitor my portfolio and its holdings closely through doing a monthly Xray on the portfolio as a whole, each investment sleeve within the portfolio and each holding. One thing that I have noticed is that in my small and mid cap sleeve is that most of my funds there have been reducing their allocation to small caps and increasing their allocation to mid caps. This could be a static process where the small cap positions have now grown in valuation to that of a mid cap position and/or some of small cap positions are being trimmed back and mid cap positions are being expanded and/or some combination of the two is happening. In any event, there seems to be a “slight” style migration movement towards the mid caps away from my small cap styled positions within my small/mid cap sleeve. In addition, the large cap style boxes are now catching a few percentage points too, about 1% each.
The Ron Rowland/Invest with an Edge style-box momentum lead just recently switched from small and mid caps, the leaders for many months, to large caps.
Go to the head of the class. Reading his newsletter seems to be catching on. I hope you find it as beneficial as I have. I have linked it below for those that might want easy access to it for their reading enjoyment. As MJG wrote ... "Read, Learn & Prosper!"
Skeet ... I've subscribed to his weekly e-mail since I first heard of it, I think close to 2 yrs. now. I used the sector momentum ratings for a while to tactically buy & sell sector etf's. It's very much workable to do that, but the amount I felt like committing to that kind of strategy wasn't enough to make the time worthwhile, so I gave it up, but continue to scan the list each week to help make more macro decisions on the portfolio.
In order to know what you have is to know how you are positioned. To know this I Xray my portfolio monthly. Now let's take the knowledge the newsletter provides and especially what you picked up on with LCG. It's the leader. With this, I look at my last XRAY report to see how much of LCG I own which is currently 21% of my equity style allocation. In this case I do nothing since I feel I have an ample weighting. However, let's say I only had 10%. With this, I'd direct new money to LCG to increase its weighting or make some other changes moving money from another style area to LCG.
In addition, I am picking up ... from my reading and review ... that real estate and emerging markets are perhaps oversold due to their current low ranking. I believe, when you check the coming week(s) edition(s) they will be moving upward. With this, I'll, at times, buy a little and add to my lagging positions based upon information the letter provides through direct wording and/or things that I have picked up on over the years through observation. Sometimes, much by what not is written but through analizing the newsletter itself provides clues that I have found to be beneficial.
It is not so much as being smarter than the next ... Its sometimes about being more clever.
Hope this helps and moves you forward with your investing endeavors.
Comments
Old_Skeet
Go to the head of the class. Reading his newsletter seems to be catching on. I hope you find it as beneficial as I have. I have linked it below for those that might want easy access to it for their reading enjoyment. As MJG wrote ... "Read, Learn & Prosper!"
http://investwithanedge.com/newsletter-archives/111313-labor-participation-rate-at-new-35-year-low
I wish all ... "Good Investing."
Old Skeet
In addition, it looks like real estate and emerging markets might be a little oversold as of its writting.
I understand completely what you are saying ...
I'll share how I use it.
In order to know what you have is to know how you are positioned. To know this I Xray my portfolio monthly. Now let's take the knowledge the newsletter provides and especially what you picked up on with LCG. It's the leader. With this, I look at my last XRAY report to see how much of LCG I own which is currently 21% of my equity style allocation. In this case I do nothing since I feel I have an ample weighting. However, let's say I only had 10%. With this, I'd direct new money to LCG to increase its weighting or make some other changes moving money from another style area to LCG.
In addition, I am picking up ... from my reading and review ... that real estate and emerging markets are perhaps oversold due to their current low ranking. I believe, when you check the coming week(s) edition(s) they will be moving upward. With this, I'll, at times, buy a little and add to my lagging positions based upon information the letter provides through direct wording and/or things that I have picked up on over the years through observation. Sometimes, much by what not is written but through analizing the newsletter itself provides clues that I have found to be beneficial.
It is not so much as being smarter than the next ... Its sometimes about being more clever.
Hope this helps and moves you forward with your investing endeavors.
Old_Skeet