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.

For those that are in-What should you do?

If you are an investor, you should not be thinking about when to jump out, and move to all cash/bonds position. Instead, you should be looking for a variety of signs that suggest it is time to lower your equity exposure as a function of rising risk relative to potential gains.Indeed, the action most people engage is called market timing — jumping in and out based on expectations of an imminent crash or rally. Instead, I would suggest they would be better off eschewing market timing and instead focusing on risk management. This is a process by which the investor raises or lowers their equity exposure based on factors other than expected short term market returns. This means your goal is not catching tops and bottoms, but generating good returns on a risk adjusted basis.

A picture of 10 year treasury vs s&p not pretty for bonds

If your in a bond fund in your 401 k this is what it might look like
Have been harping for many many months to get out of bonds.

Treasury Yields on the Rise

Did you like Treasuries when yields were at 2.00?
Then you should REALLY like Treasuries now.The yield is up to 2.24%

Read more: http://www.businessinsider.com/interest-rates-are-exploding-higher-today-2012-3#ixzz1p6g3r4K3

Of course if your holding a bond fund your going to find out that the value of your fund is dropping
I've been telling people for many months to get out of bonds-especially in your 401k

Market Crash comming?

John Hussman will be right one day but until than just stay with the trend


http://www.advisorone.com/2012/03/12/doomsayer-hussman-says-market-crash-comingaccordin?t=income-planning&utm_source=retirementreport031312&utm_medium=enewsletter&utm_campaign=retirementreport

Bull Market

According to Bloomberg Businessweek, this
bull market has serious self-esteem issues. We are almost exactly three
years from the March 2009 low, but fear of the market still has not worn
off.
Next week marks the third anniversary of the current bull market cycle in
U.S. stocks. Back on March 9, 2009, a day not easily forgotten in the annals of
wealth destruction, the S&P 500 sank to a 12-year low of 676, the bottom of the worst bear market since the Great Depression. Since then, the S&P has more than doubled.
Investors for the most part are still curled up in the fetal position,
preferring to put their money in bonds and money market accounts rather than
stocks. Investors have pulled more money out of U.S. domestic mutual funds than
they’ve put in for five straight years.

Market surging -individual investor missing it

http://online.wsj.com/article/SB10001424052970204571404577253691991108830.html?mod=e2tw

Buy and Hold is dead-You need to pay more attention

There's an interview on wealthtrack with Andrew Lo,MIT professor,you can watch it here
http://wealthtrack.com/

To paraphrase Lo:
1)Markets are not stable. Investors need to actively manage risk.
2)Investors suffer from “diversification deficit disorder.” In short,
diversification amongst stocks and bonds is not enough.
3)Stocks may perform over the long run, but “buy and hold” is dead. Investors
need to pay more attention to their portfolios in the short run

Have you been on this ride?

Here is a chart that you should print out and hang on your wall. I have been trying to get people back in the market since 3/09 when my relative strength indicator showed stocks being stronger than moneymarket. From talking to people and watching the mutual fund flows,there are still a ton of people sitting on the sideline.

I'm pretty sure that this chart explains why.You can probably understand why a tactical strategy that aims to avoid some of the loss and capture some of the gains has become very popular in recent years. As wealth managers often point out: the trouble is that few investment managers have any skill or experience actually doing it. And, many of them who have actually been doing it long enough to speak of haven't done it very well.

Market gurus? Please ignore them

I'll say it over and over again but this is why you can't pay any attention to predictions. This is really unbelievable when you think about it.When ever these guys open their mouth the market does pretty much the exact opposite
You have to follow the trend-If you listen to predictions your going to get screwed everytime

Is there a HUGE RALLY AHEAD?

Here's another guy's opinion. It makes sense but I'll go with the trend.
Doug Kass refers to the stock market in a recent commentary. He talks about the
large-scale asset realignment that has been going on for the past few years:
According to the Investment Company Institute, in 2011 retail investors liquidated $130 billion of domestic equity mutual funds, accumulated $1.7 billion of international stock mutual funds, purchased $120 billion of bond funds and bought $8.4 billion of high-yield funds. Since
the beginning of 2007 (through 2011), retail investors liquidated over $450
billion of domestic equity funds, accumulated $130 billion of international
stock mutual funds and purchased $930 billion of bond funds. The
near-$1.4-trillion swing out of domestic equity mutual funds and into bond
mutual funds is unprecedented.
Since 2001, as measured by stock holdings as a percentage of total financial
assets, individual investors’ share of stocks has declined from 25% to only 18%.
In the same time frame, stock mutual funds have dipped from 79% of total mutual
fund assets (excluding money
market funds) to only 65% at year-end 2011.
A re-allocation into stocks (and out of bonds) represents an underappreciated
and potentially massive (and latent) demand that could easily be the catalyst
for a move to all-time highs in the S&P 500in
2012.

Super Bowl Rosters Were Filled With Underdog Stories

Here is another example of predictions gone wrong-All of the so called experts that predict who is a 5 star or a 2 star and that is all they do can't get it right
http://footballrecruiting.rivals.com/content.asp?CID=1327387

Is your 401k still in cash?

Each week I read the flow of money as reported by the mutual fund industry. And I know from reading that information that there are alot of people that have missed this rally.
I have said since 10/21/2011 that my main indicator the relative strength of stocks vs. monymarket was what I call a buy signal. At that time the s&p was at 1238.25. As I type this the s&p is at 1343.78. That up over 8%. So there are alot of people that are still not in the market.People that are sitting in cash in their 401k's.
I can almost guarrantee that these people will eventually get back in.They've done this before and will do it again because they refuse to pay attention. They refuse to either monitor it themselves or get someone that knows what their doing . So these peopl if the market continues up will get in and than they'll sit there not knowing what to do.
And you know the ending to this story. We've been there done that.

Why people have financial advisors

I stole this from Josh Brown:

Why do people hire financial advisers? The answer might surprise you. Sometimes they are merely looking for someone to pull the trigger for them when they’re too shell-shocked to invest for themselves. Other times it’s a scapegoat thing - when investments go bad, it’s a small comfort to some that “it was all his idea.”

If you don't have one and you haven't pulled the trigger your missing quite the rally. But the key is not to have to use the 2nd reason. You need a financial advisor that won't have you say "...It was all your fault."

Money is still comming out of mutual funds while s&p moves higher

So for the last week more money has come out of equity mutual funds .The week before was one of the few weeks in the last year or so that money went inot equity mutual funds

This is why people don't make any money when investing. i know exaqctly whats going to happen.When the market keeps going up those that are out will all of a sudden decide its time to get back in and than BOOM!!!! This is one prediction you can take to the bank.

Just like i've been saying for months,they have all of their money in bond funds and after they get hammered there they will move it to equity funds right at the top

I have been saying to get into stocks since 10/21/--the s&p is up close to 7% since than.Since 12/31 the s&p is up over 5%.

92% of 8000 mutual funds had losses

The average U.S. stock fund lost 2.90% in 2011, while the S&P 500 stock index produced a total return of 1.52%, according to Lipper Inc. Of about 8,000 funds that Lipper tracks, 92% suffered losses... Foreign fund managers performed even worse, with an average 13.90% loss, owing to the European debt crisis. U.S. Treasury fund managers took the winner's stand with a 16.04% return, as investors flocked to government securities for safety.

This is why I have been using index etf's to manage my accounts.It makes little sense to try to find the 8% of mutual funds that didn't lose last year. And I'm pretty sure the results are pretty similar year in and year out. And if these mutual fund managers can't pick winners how do you expect to do it?

Also,it makes a huge difference being in the right sectors,It can't be emphasized enough.

In or Out?

My goal in managing money is to be in the market during up trends but more importantly to be out of the market during down trends.
Isn't that what you really want?
What else does a financial advisor bring to the table ?
If he's bringing buy and hold why do you need him?
Why pay a fee?
You can do that on your own

The S&P is up over 4% since January 1st--Are you in or out?

Target Date Funds Miss Their Mark Again

Article from Wall Street Journal

http://online.wsj.com/article/SB10001424052970204124204577150803937192884.html?mod=wsj_share_tweet

Wall Street Journal article on 401k's

Article on 401k's from the wall street journal
This is a theme I continuously harp on
You need to take charge of your 401k. if you can't be bothered with it you need to hire someone like me that will watch it everyday.

http://online.wsj.com/article/SB10001424052970203462304577138834217346506.html

Another example of why you have to ignore predictions

This is something I learned after being in this business for over 20 years.
And why I don't follow any of these predictions but instead watch the market and follow the trend either up or down


http://www.rollingstone.com/politics/blogs/taibblog/goldmans-latest-boiler-room-stock-america-20120102#ixzz1ibC8iIm7

Happy 2012 and your Retirement plan assets

So here we are in 2012.
As far as investing goes 2011 was very volatile but went nowhere. The s&p pretty much ended unchanged. If you were in Government bonds you has a pretty good gain. But if you were in any foreign sectors the gain in bonds was pretty much cancelled out by the loss in the foreign sector.
So what are you going to do in 2012?
From the flow of money reported by mutual fund companies people were getting out of stocks and pouring into bonds.
Are you prepared for a stock market rally? or are you just going to sit with what your invested in from last year?
With a long list of uncertain political and financial events dominating the worldwide headlines, the timing is perfect now for you to make an effort to better preserve and grow your retirement plan assets
If you have been frustrated in the past by your inability to find the time, experience, or comfort level in making your own retirement plan investment decisions, you should reach out to a professional investment advisor.
Make sure to look for a professional investment advisor who will provide you with a fiduciary level of investment advice. A fiduciary investment advisor will always put your investment objectives first and not try to “sell” you an investment product that you don’t need.
The person that cares most about your retirement plan account is you.
Look for an investment advisor who shares those same feelings.Also look for a financial advisor who is experienced in providing investment advice to individual company retirement plan participants.
This advisor should be able to provide you with an investment management game plan for the mutual funds in your company retirement plan menu.
Last, and most important, is to find an investment advisor who can articulate an investment management strategy for your company retirement plan account in both up and down stock market and U.S. economic cycles.