Here is an update for the end of the month results for the Golden Years Model Portfolio. Fed Chairman, Ben Bernanke, gave a first ever press conference last week. His comments about maintaining accommodative Fed policy for an extended time was perceived by the market as a weak dollar policy. It gave us a good reason to reinvest in gold and add to stocks. Gold surged and stocks went higher and our model portfolios benefited.
(Click on chart for easier viewing)
This blog post does not constitute an offer of investment advise. This blog is only provided for educational purposes. Please read theImportant Blog Disclosure posted in the right channel bar.
The main objective of the Golden Years Model is to provide consistent returns year after year with a fraction of the volatility of the stock market. We continue to meet that goal year after year. Below is a chart of the year-to-date performance of the Golden Years model portfolio.
(Click on chart for easier viewing)
This blog post does not constitute an offer of investment advise. This blog is only provided for educational purposes. Please read the GWM disclosure document posted on the right channel bar.
We find the market back at levels that have provided significant resistance in the recent past. While the market bounce-back has shown this market to be very resilient, we are now at the upper end of the recent trading range. We will need to wait for the S&P 500 to decisively break through the 1334-1336 resistance zone before an all clear signal is given. I will remain defensive until the market pushes through these levels.
Good earnings reports vaulted the market higher today. The market opened up and remained up into closing. All sectors were winners.
"The rumors of my death are highly exaggerated." I don't know if Mark Twain was the first to utter these words, but they could be applied the energy market today. After Goldman Sachs essentially issued a sell recommendation on oil and commoditites last week, the sector came roaring back today.
This morning I took a position in Haliburton (oil service company) and BHP Billiton, a global resources company as well as taking a position in the energy ETF, XLE yet again. I also added to our position in PRPFX (Permanent Portfolio). PRPFX is a unique fund which has positions in gold & silver bullion, high growth stocks, treasuries, etc. Permanent Portfolio Fund has a set it and forget it type quality.
The GWM Inflation Hedge folio continued to gain as silver is reaching escape velocity.
The downward pressure on the stock market continued today as investors reacted to Goldman Sachs' downgrade of the commodities and oil sectors. While the longer term trend remains to the upside, the near term picture has gotten worse.
Oil and materials stocks led the whole market lower. When markets correct, correlations go up and diversification offers little protection. As a consequence I continued to reduce our equity exposure.
After the fourth day of decline the market is due for a bounce. Yet , our indicators are telling us that the big players are in sell mode. It is generally best not to trade against the big institutions. For the moment we will keep a defensive posture.
Last week the S&P 500 stalled out around the 1338 resistance zone. If the selling continues on Monday, we could be in for a "deeper" correction. However, if money moves back in we might be seeing new highs in the S&P500.
As of now, I do not know what direction the market will take. I will be paying close attention to the market Monday morning. If selling continues I may lighten up a little further on some equity positions.
The market has recovered very quickly. It may be getting a little tired here. We might expect it to go sideways for a little while, correcting through time. A small pullback would also be a possibility, maybe 3%. On the other hand, if it breaks through resistance we could be off to the races.
The longer-term trend remains to the upside. I am quite sure that any dip would be bought in short order.