A financial test for all to take

Ok, here's a test for you, these are the closing values for the s&p 500 at month end:

3/31/ 1325.83

4/29 1363.61

5/31 1345.20

6/30 1320.64

7/29 1292.28

8/31 1218.89

9/30 1131.42

Can you tell me what is happening? Come on its really not that hard to figure out

Well i'll tell you and now you'll know more than most--THE TREND IS DOWN

John Bogle says stocks aren't cheap but buy them anyway

This guy just doesn't get it. Some of the things he says I can't even understand. Because someone is selling that means someone is buying so everyone is a long term investor-or something like that'

What is so hard to understand that there are trends-trends up and trends down--when the trend is down you stand aside when the trend is up you get back in--hardly rocket science.

He says stocks are not cheap,which I could care less about, but he says buy them anyway. If he believes that why doesn't he wait until there cheap?

You can watch the video here:

http://news.yahoo.com/video/breakout-25481852/john-bogle-on-stocks-bonds-and-timing-the-market-26768952.html#crsl=%252Fvideo%252Fbreakout-25481852%252Fjohn-bogle-on-stocks-bonds-and-timing-the-market-26768952.html

Want to boost your 401k return by 3% a year?

http://moneywatch.bnet.com/investing/blog/fund-watch/want-to-boost-your-401k-returns-by-3-percent-annually-heres-one-way/699/

what if you don't have a 5 year time horizon?

http://seekingalpha.com/article/296205-what-if-you-don-t-have-a-5-year-investment-horizon?source=feed

This addresses on of my pet peeves--when a financial advisor quotes returns over a 5 or 10 or longer time period-that means absolutely nothing to a person at this particular place in time

People who got 401 k advice got higher returns

http://www.marketwatch.com/story/401k-savers-who-seek-advice-get-higher-returns-2011-09-26?link=MW_story_latest_news

This is what i specialize in

Investors Abandoning Stocks

from the WSJ tonight:


…across the financial markets, a sea change is taking place. Investors are abandoning the time-tested “stocks for the long run” optimism that dominated since the late 1980s. Instead, there is a widening belief that the mess left behind by the housing bubble and financial crisis will be a morass to contend with for years.

If you are a believer in sentiment,this is actually a bullish signal

6 things to know before choosing financial planner

http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2011/09/23/6-things-to-expect-in-a-financial-planning-engagement

I am not a financial planner--I manage your money

Does your 401k have a self directed option?

Most of the people I talk to don't know-worth looking into

http://www.foxbusiness.com/personal-finance/2011/09/23/pros-and-cons-self-directed-401k/

Buy and Hold-or Captial Preservation?

For the week, the Dow was down 6.4%, the S&P 500 was down 6.6% and the Nasdaq was down 5.3%, the worst week since Oct 2008

Your 401k--What to do

this is stolen from ric lager who writes a lot better than me

Right now is another once-every-few-years opportunity to stop and take a good hard look at exactly what you own in your company retirement plan account. If you own a mutual fund that you don't understand, now is the time to sell it and put the proceeds into the money market fund.
It makes no long-term sense whatsoever at this time in both the world and U.S. stock market cycles to try to "buy-and-hold" stock mutual funds in your company retirement plan account.

You don't have to relive the dramatic stock market losses of three years ago in your 401(k) plan. Get enough of your current company retirement plan balance out of the stock market now and into the safety of the money market account.

The current stock market decline will eventually come to an end. The most profitable way to take advantage of the bottom of this current stock market cycle in your 401(k) account is to have a money market balance to invest when the stock market begins to rise again.

Annuities-If your thinking of buying the latest hot product -READ THIShttp://blogs.wsj.com/financial-adviser/2011/09/21/the-phantom-menace/

http://blogs.wsj.com/financial-adviser/2011/09/21/the-phantom-menace/

Update to my update with dow down over 300 points

So how fast things change or do they?

In my last post I was saying how there was nothing happening etc etc. Well since than things have changed rapidly. The s&p which was basically flat since my indicator said that money market was favored is now down 5.5%.

Sitting with about 75% cash is feeling very nice to my clients this morning.

On a side note, i was talking to another financial advisor the other day,and we were comparing strategies. He was the buy and hold kind. i tried to show him how i operate and he said I was a market timer. I tried to tell him that that was not really true. I don't try to time the market I try to follow the trend. When the trend is down I am out, when the trend is up I'm in.

His comeback was that if you get out you don't know when to get back in. i tried to show him that I am not guessing on tops or bottoms. What i do is follow the trend,I nevr get in at the exact bottom nor do I get out at the exact top but there is alot of room between the bottom and the next top and the top and the next bottom that I am glad to partake of.

Net net he was happy to put his clients in mutual funds and whatever happened happened because the market always comes back.

There is no reasoning with these people

Update

Since there is really nothing happening i thought I'd give a quick update.

My main indicator is still favoring being in cash as opposed to being in stocks. It turned to money market when the s&p was at 1200 on 8/4/2011. As I write this over a month later the s&p is at 1197 basically flat.

Since that time there have been a few positives. the qqq which is the nasdq 100 has turned positve against money market as has rsp which is an etf that is an equal weighted version of the s&p.

All in all I remain approximately 25% invested and we'll see what happens.

The trend is your friend and capital preservaion-remember those 2 things and you can't do to bad.

Anyone interested in getting a new perspective on their investments, you know where to find me.

This in a nutshell is financial planning

The safest and best way to avoid a retirement shortfall is simply to save more, save longer, and invest better. If your assumptions are conservative and your investment results are favorable, you might end up with extra capital. That’s a high-class problem to have. If your assumptions are too aggressive, you’ll end up like all of the public and corporate defined benefit plans: under-funded. The further you are away from collecting Social Security, the less likely it is you’ll see all of it, so you can’t count on that to bail you out.

I can't help you with the 1st two but I can help you invest better.

if your sitting with bonds you shoould take heed

http://mobile.bloomberg.com/news/2011-09-13/the-risks-lurking-in-treasury-bonds.html?cmpid=bit

Why trend following? Or why aren't you still listening to 8 tracks

The way I manage your money is to follow the trend.
What does that mean?
Do you remember when Sony came out with Betamax and it was exciting to rent movies to play at home. Than came VHS and you didn't want to own a Betamax. The trend changed. Now we get movies on demand or mailed to us. The trend changed.You'd be foolish to stick with that VHS machine.
Do you remember 8 tracks than came cassettes than came cd's. The trend changed.
Investing is much the same. You don't want to be in stocks when bonds are in favor. You don't want to be in large cap stocks when small cap is in favor. The trend changed and you need to change.

goldman sachs slashes its year end s and p target from 1400 to 1250.

Do you think they use one of those magic 8 balls to make their predictions?

Buy,Hold, Regret--so says this article

article from the Economist

http://www.economist.com/node/21528907

Carnac says...

good post from systematic relative strength-it makes apoint that i have harped on--all the major brokerage houses try to make predictions of where the market is going ,what the gdp will be and as this article shows what the price of gold will be-and its a moving target-they can't predict any better than Carnac(you have to be old and have watched johnny carson)

http://systematicrelativestrength.com/2011/09/12/moving-the-chains/

This is all you need to know to navigate the market

As with most things in trading, the least accepted methods are also the most efficacious. One of the least accepted trading methods by both academia and the financial media is the concept of trend following. In it’s most elementary form, trend following is about being long when markets are rising and being short when they are declining. There are no forecasts or shoulds. There is only the current trend and what is.

One of the most effective journalists to popularize trend following is author Michael Covel. He almost single-handedly has raised the consciousness of investors around the world to the effectiveness of trend following. He has brought many of the world’s greatest trend followers to light, and I cannot thank him enough for that.

If trend following was widely accepted, there would be no need for about 95% of the people employed in the securities industry. Needless to say, this fact alone is one of the main causal reasons that trend following is out of the mainstream. Most simply ignore it’s incomparable track record in both rising and declining markets.

Michael Covel has provided the research and the data to a mass audience to show what we trend followers are all about. I cannot express properly how grateful I am for Michael’s efforts. His impeccable journalism is rare in any context, but especially in the field of trading and investments. As a result of his work, the great achievements of trend followers can no longer be ignored nor viewed as just an anomaly.

Michael R Gibbons
Managing Partner
Gibbons’ Trading LLC

2008? rememeber when you lost 40% of your money?

I'm starting to see articles with predictions that this is going to be equal to or worse than 2008-2009. Here is one example:http://www.businessinsider.com/prepare-now-there-is-so-much-that-could-push-us-into-another-2008-crisis-2011-9
Do you remember those years? It wasn't that long ago and you probably have erased those years from your memory as far as your investments go.
So are you prepared if it is another 2008 or are you still using the same guy that you relied on back than,the guy who told you to stick to "his" plan of buy and watch your money disappear and than pray that it comes back by the time you need it?
Wouldn't it make more sense to take some kind of defensive action to preserve your capital now so that you can grow it when conditions are more favorable?
If you'd like to explore alternatives to what your doing now you know where I am

Do you know who will inherit your 401k? your IRA?

You and your heirs could be in for a big surprise

http://www.marketwatch.com/story/family-feuds-who-inherits-401k-or-ira-2011-09-07

Is this how you've been investing?

this was taken from http://systematicrelativestrength.com/feed/

“Investors overweighted equities when they were hot, panicked when they crashed and are still sitting on the sideline,” Mr. Matson said. “They bought high, sold low and most won’t get back in until the market returns to all-time highs, repeating the same disastrous pattern.”

I’m sure these free-range clients think they are doing the right thing, but good investing is not emotionally reactive. You’ve got to settle on a proven, profitable long term strategy—we happen to like systematic relative strength investing—and then lean against the emotional currents. When you are feeling particularly fearful, perhaps you should increase your bet. When you are feeling quite self-satisfied, it might be time to consider a little diversification. Or you could just hire a competent advisor.

Are you finally ready to do something about your money?

It's so easy to keep things as they are. Making a change is not easy.
And when it comes to money people for some reason would rather ignore it,I guess their hoping it will resolve itself. Even though they know they should be doing something most people just ignore it. There's no sense of urgency like when they need that brand new car.
Are you finally ready to face the fact that the same old is really not working that you need to make a change. Are you ready to finally start to have someone manage your money that knows what their doing?

How do those august statements look?

So those august statements are startng to roll in. Some of you are probably not going to open them and those of you that do will probably throw them in the drawer and pretend they don't exsist.
Now were heading into the really exciting months september and october.

You can't keep on doing what your doing,you need to think about capital preservation.

If your tired of taking the big hit to your portfolio why don't you try something different? You can't just keep ignoring it you need to be proactive.If you believe that crap that it'll come back,i'm a long term investor,etc etc. you are a fool and i'm pretty sure deep down inside you know there must be a better way.

Since June I have been preaching that you need to take some off the table and I'm hoping some one listned heeded that advice.

If you want to be able to open your septemebr and october statements you know where i'm at and i'd love to show you how to manage risk.

POWER BACK ON

so after 130 hours BGE finally got my power back on-I thought comcast sucked but i'm now putting BGE in the top spot-These people a are truly morons The power went off saturday at 9:15--we called at that time and figured that was that-so yesterday i send an email to the county executive ken ulman who got right back to me and had one of his people get bge to email me-their email says something like this-thank you for contacting us-our records show your power has been restored.WHAT the F***K are you talking about? my power has not been restored--this just blows my mind--everytime you respond to them they send you the same freaking email--they can't tell you anything--net net-the power is back on--i was on my way to the library to log on when i passed like 5 trucks from alabama power around the corner doing whatever it is they do and the power is on As far as the market goes All the point and figure indicators have turned positive and this down today could be just a normal pullback. Rsp which is the equalweighted s&p just turned back positive agains moneymarket on a relative strength basis. I have bought for clients some rsp this morning. My main indicator is the spx vs moneymarket and that has yet to turn back to positive. As usual capital preservation is my main objective so i am prepared for anything