Congrats to all you buy and hold types

If your the buy and hold kind you've managed to meet your goal. The market as measured by the s&p is now back to where it was in january and there's no telling how far down it'll go.I know you buy and hold types love that kind of pain.After all you've done it at least twice,once during the dot com years,and again during the housing crisis years.
If you ever decide your tired of doing that you know where to find me.

Big rally in bonds gives you another chance

We've had a pretty big rally in bonds especially the long end of government bonds. If you never moved any of your money,especially your 401k money out of bonds you have another chance right now.
The 10 year which went over 2.25% back in the march-april time period is around 1.75% .
Unless you think yields are going much lower,now in my opinion is a good time to get out.
The way bonds work is if interest rates start rising the value of your bonds goes down. If you've been in them for a while its time to think about getting out 

So here we are again.The market as I type this is down 176. I have been warning my subscribers and clients since April 9th to take at least 25% of their assets in their 401k and put it into moneymarket.
Hopefully anybody reading this did the same .
Today we broke a triple bottom on the S&P 500 at 1350. What that means is that we broke alot of support and we could be heading much lower.The next major support looks to be around 1265 which is approximately 6% lower from here. Of course there is no telling if that support will hold or not. And there is no telling if we reverse back up sooner than that.
The point is that you can't afford to take that chance. Do you remember what happened back in 2008? Do you remember what happened back in 2002? Can you afford to sit there and hope you get back to even in the next 2 years if we have another meltdown?
My point is that if you would have taken off 25% or more you would have some cash to redeploy once this correction is over with.
I want you to know that based on relative strength equities are still favored over cash or bonds at this point. Thats why I have only taken off around 25%.If relative strength changes to favoring moneymarket I will move a substantial amount of money into moneymarket.

As i've said over and over having been doing this for a long time its all about capital preservation. There is no reason not to take precaution with your retirement assets. You can always get back in.

If you have any questions or comments don't hesitate to contact me. By the way how many of you have heard from your financial advisor? And if you have I'll bet he said something like stay the course,be patient,follow the plan. Can you afford to do that--can you afford to lose 20-30% of your retirement assets again?

About that Bond Fund you found so safe

From this week's Current Yield column in Barron's;

A rise in the benchmark 10-year note's yield to around 2.39% from just over 2% and the 30-year bond to 3.46% from 3.10% doesn't sound like much. But the resulting price rises wiped out several years' worth of the paltry income these securities generate. The popular iShares Barclays 20+ Year Treasury Bond exchange-traded fund (TLT), which tracks the long end of the market, lost 6.5% in the wake of the March FOMC meeting. That was equivalent to an 800-point-plus drop in the Dow.

You better be paying attention

Today was the day that the spx(s&p 500) reversed down. This is one indicator I follow and use as an early warning signal.
I sent out an urgent email over the weekend after the weak jobs report warning my subscribers that a reversal down in the spx looked imminent. Today I sent out an email telling them to move at least 25% of their 401k and/or IRA money into moneymarket. I moved my 401k advice accounts into moneymarket.I also moved some money in my mangaed accounts into money market.

Now this could reverse tomorrow but we have some outstanding gains over the last few years and I see no reason to be a PIG. After all its Passover!
This is a defensive measure because in my mind its all about Capital Preservation.

My main indicator is still favoring stocks but there are a bunch of minor indicators that are indicating some trouble ahead.

We'll see what happens from here. I'll be watching the spx to see if it can make a new high at 1430 which would be very positive. On the other hand it could make a lower high or a double top at 1420 and reverse down from there which would be very negative.

Bottom line is we're at a crucial point right here. This is where you need someone with their eye on the ball. This is a place where the buy and hope advisors have real problems

Did Noah wait for it to start raining before building an Ark

It's been a great run if you've been in stocks since 3/09.I use that 3/09 date because thats the date where my relative strength of stocks vs moneymarket turned to favoring stocks.

If you took that signal your up over 60% in the s& p alone.

The big question is what are you going to do now. I'm not saying that we're not going to continue up.
I don' t make those kind if predictions.
What I am saying is that you have to be prepared in case stocks start down.

I know what happens. I've been there done that.Your feeling good about yourself and your financial advisor. Your both feeling pretty smart right now. But what's your plan?To give you an example of my plan and it's MY PLAN and the plan I use for my clients. It might not be for you.I am watching the s&p chart. At current levels if it declines to 1285 it will be the first sell signal in the chart of the s&p since 12/2011.If it does hit 1285 I will move approximately 25% of my clients money out of stocks and into moneymarket. At that point I will see how it plays out. My main indicator that compares relative strength of stocks bonds and cash remains on a buy signal for stocks so until there is a change in that indicator I will stay overweighted in stocks.

It's all about capital preservation and I would be taking the 25% off to protect that capital.On the other hand for those that have been sitting in cash/moneymarket since 2008 this is a good time to start putting some of that money back in the market. At current levels you could start putting back into the s&p (an index fund preferably) like 25%. If the s& p drops below let's say 1280 you could just move it back to cash. If it continues up you at least have some invested.The point of this post is to get you to start thinking about what to do.

Sort of like Noah didn't wait until it started raining to build an ark

Market undervalued and your buying bond funds?

Lost in all of the hullabaloo over Apple’s dividend, oil prices, Iran, and so on
is the fact that the market is undervalued—and has been for most of the past
year, according to Morningstar’s fair value estimates

What I know about valuation methodologies could probably fit on the head of a
pin, but that’s what Morningstar’s analysts do all day. When they look at where
stocks are selling relative to their estimates of fair value, the market as a
whole—and even most sectors—is still undervalued.
Retail investors have been incredibly reluctant to re-engage with the stock
market since being burned in 2008-2009. For a couple of years now, much more
investor money has been flowing to bond funds than stock funds. I’m just not
sure if that is a rational move when stocks are undervalued.