I thought I’d bring back a thread that Scott used to anchor on the board titled, “What Are You Buying Selling or Pondering?” According, to @Scott
, he will be lurking and will not be as active on the board as he was in the past. I have seen others go inactive form time-to-time and then venture back as their schedules allow. Perhaps, Scott too will be back soon as a regular poster.
Currently, my buy strategy was/is to buy at certain steps during this market decline and its rebound. In review, I have recently bought at 1922 & 1880 readings for the S&P 500 Index while it was trending downward after it had pulled back into correction territory. One might say, well, that is not much since these two buys only equal a sum of about one percent of your overall portfolio’s value. That's true; but, note, this does equal about two percent of my equity valuation since my current allocation is about 25% cash, 20% bonds, 50% stocks and 5% other assets as reflected in my recent Instant Xray analysis. Currently, I plan to buy again on the upswing somewhere around 1870-1890 range … perhaps, even today. If the market runs upward today above 1900, I simply want buy; and, I'll a wait for another day. As I write, the Index is above 1900 and up about 1.2% thus far in the day. In addition, my portfolio has a distribution yield of better than five percent on current valuation (about 1.25% per quarter) so a good bit of the yield is now going back into the market while valuations are down.
Now let’s visit and study this as to what it will do for me if we have a 10% rebound in equity valuations. Since, I am now close to 50% equity; and, with a 10% rebound my portfolio should bubble close 53% to 55% in equities. Above the 55% allocation, I’ll start to sell down equities and again raise my allocation to cash. First Quarter 2016 Earnings reporting will play heavily in how far I decide to sell my equity allocation down as we approach summer. Currently, my asset allocation for equities calls for a range on the low side of 45% and on the high side of 55% with a target allocation being 50%.
According to Jeffery Saut of Raymond James we have been in a selling stampede which usually last from 17 to 25 days with some lasting longer. We will be closing in on day 17 of the stampede next week. Mr. Saut also states that it usually takes four to six times longer to recover form a stampede than it lasted. With electronic trading used by big money along with the flash crowd ... who really knows when, and at what level, the correction in the stock market will end?
So, this is what Old_Skeet has been pondering along with developing my rebound strategy.
I wish all … “Good Investing.”