Confusing times. Not sure we have ever seen anything like it.
- Fiscal Cliff and associated tax reform
- European Sovereign Debt Crisis
- Lowest Interest Rates in recorded history.
- Federal Reserve Operation Twist, QE, QE2 and QE3.
My Current Position
As my readers know, my dividend portfolio is 33% cash. In addition, my new (and hopefully improved MFI portfolio) is also 50% in cash. I have been moving away from what I think are higher risk stocks such as FCX and TROX; which could really pullback in a global recession. But I also have quite a few quasi bond funds; that could really get hurt if interest rates spike (which seems to be a question of when, not if).
For lack of better ideas, I am largely staying the course the rest of the year. I did buy some 2x short etfs (SDS) back near the start of November. I did quite well on them and am tempted to reload; but my track record on timing demises of the stock market are sketchy at best.
The beauty of my dividend portfolio is that the dividends should continue to get paid (assuming I picked stocks with some degree of safety) and in the event of a 20% drop; I will be buying new shares at a discount. Admittedly; it still hurts psychologically to see your portfolio worth 20% less; but I also have a fair chunk of cash I could put to work in such a case.
The Decision Moose is a favorite of mine for directional changes. On 9/21/12, he switched to Gold, away from S&P 500. he currently is still bullish gold, with Pacific (x Japan) EPP, being his number 2 pick.
What Do You Think?
I have some savvy readers on my blog. What do you guys and gals think regarding stock market direction over the next 6 months?
Posts
3 comments:
No idea where the market is going but if I had to guess, it would not be good.
I have some cash in my account which is almost never the case, from the KSW buyout. Been wanting to put the cash into something but am simply not finding anything of interest. I can almost always find something but not right now.
Also listening to The Big Short by Michael Lewis on CD during my work commute and finding it fascinating which is probably not helping me find someplace to invest long.
I view all this uncertainty as a potential opportunity. Remember what Warren says, "Be greedy when others are fearful."
I know the Buffett quote, I am just not convinced others are fearful. Thanks for posting.
Post a Comment