Tuesday, August 30, 2011

Pulled the Trigger on Ruger

After making a 12.5% rate of return in less than a week, I sold Sturm & Ruger. There is an old saying on Wall Street that says, "Bulls make money and bears make money but pigs get slaughtered."







Thursday, August 25, 2011

All Eyes on Ben Bernanke on Friday

The market is eagerly looking forward to Ben Bernanke's comments in Jackson Hole on Friday. Every word will be sliced and diced. In particular, investors will be looking for comments on possible future quantitative easing programs; in other words will the printing press start up again if needed?








Warren Buffet announced today that he is going to inject $5 billion into Bank of America, a badly needed rescue. The move backstopped the financial sector this morning. With that unexpected news I closed our inverse positions in the financial sector. I probably should have held on a little longer as the initial bounce in the sector was faded later in the day.


On another note, our bond positions in the Flexible Income folio are bouncing back. Additionally, I did add a little to our extremely small Apple position when it backed off on the news that Steve Jobs is retiring as CEO. I also bought some McDonalds and a little Sturm and Rugar, a gun maker that can't make guns fast enough to keep on the shelf. Evidently people feel they need a gun in the new economy. Ha-Ha.

Wednesday, August 24, 2011

Gold Stopped Out

We got a Smart Stop sell signal for gold today. In adherence with our risk management discipline, I sold GLD. Additionally, in a discretionary move I also closed out gold miners (GDX) and silver (SLV).

After getting over $1,900 an ounce gold suffered a quick reversal. I still think the precious metals will move higher in the future, but I feel it is prudent to step aside for the moment.




The market is much confused at the moment. It is searching for direction and there is no consensus on whether the market should rise or fall. All asset classes are being affected, include most of what we own. Stocks are very oversold and a bounce is warranted, but the intra-day moves are absolutely unpredictable, making it hard to commit money.

This type of volatility is generally not a good sign. While the opportunities might very well exist, the risk levels are off the charts.


This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.


Tuesday, August 23, 2011

Additional Positions Added to GWM Model Portfolios

I took a position in another ag related ETF, Grains (JJG).


This is another one that held up well during the sell-off.


I also bought an accidental high yielder that CNBC's Cramer always pounds the table on, Annaly Capital. This one has a very high dividend payout.










This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.


Monday, August 22, 2011

Added Positions to GWM Model Portfolios

It is starting to look like the market is leaning towards and pricing in a stagflation scenario. I say this because one of the best performing fixed income sectors is inflation protected bonds. Additionally, the agricultural sector is holding very well in the current market sell off. I am expecting most other comodities to sell off, but ag is working, in particular sugar, wheat and corn. I took a position in a sugar ETF (SGG) today.





I took a new position in the silver ETF (SLV); it is breaking out again.





Finally, I added a couple financial sector short positions today. Under normal conditions the financial sector represents about 12% of the S&P 500. They now have a weighting of over 13%. They represented 8% during the 2008 bear market. They are so out of favor I think they have more room to fall.

I bought SEF, a 1X inverse financial ETF in the Long/Short 1X Folio and SKF, a 2X inverse financial ETF for the Long/Short 2X folio. The Director Model Folio is the only model that allows 2X investments.

Short 1X
Short 2X



I generally do not blog about all purchases and sales, but I think it is helpful to show GWM investors how we are repositioning the GWM Models Portfolios in the tough market conditions we now find ourselves in.



This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.


Saturday, August 20, 2011

How Long Will the Selling Continue?

Gil Morales, financial advisor extraordinaire, is featured on the Varney and Co. show. I think he could very well be right in his assessment of the market and the opportunities. This is the same video linked in my GWM Model Portfolio Management report posted just prior to this post.

Click the text link below to view this brief, yet timely video.

http://www.gerritzwealthmanagement.com/how-long-will-the-selling-continue/


Market Assessment --- Bull or Bear ---

Click the text link below to view my Bull/Bear assessment report and how it will effect the management of GWM Model Portfolios.

http://www.gerritzwealthmanagement.com/wp-content/uploads/2011/08/GWM-Model-Portfolio-Mangament-08-20-2011.pdf


Click the text link below to receive a Free Subscription to the GWM Newsletter and Gerritz InSights Blog

http://www.gerritzwealthmanagement.com/gwm-personal-portfolio-management-newsletter-and-blog-signup/



This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.




Thursday, August 18, 2011

The Gerritz Letter - Special Mid Month Issue Published

I have just mailed out a Special Mid-Month Issue of The Gerritz Letter. It has also been posted on the GWM website.

The bears came out in force today as nervous investors fled the market.  There were numerous negative factors, that I won't delve into now, that weighed  on the markets all day long.

Due to our defensive posture our accounts held up well over all.

I encourage you to read the mid-month issue of The Gerritz Letter. I will be discussing how I am managing accounts during this volatile period.

Thursday, August 11, 2011

Sold Some Defensive Sector Holdings Today

Our Swiss Franc ETF (FXF) was stopped out today.


I also sold our gold ETF (GLD)  and our 10 year treasury ETF (IEF) today. They are currently slipping after reaching over bought levels. These type of parabolic gains are unsustainable. I am sure we will revisit these great investments again before long. I just might add that no one ever lost money taking a profit.






This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.



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http://www.gerritzwealthmanagement.com/gwm-personal-por

Golden Years Up More Than In-Betweener

All GWM Model Portfolios continue to gain even as the market crumbles. Our recent analysis of the market proved not only to be correct, but very timely. Our Smart Stops risk management strategy took us out of equities early on and our Market-Direction-Model (MDM) has constrained us from re-entering equities for the most part.

Our market scanning capabilities helped us identify what was working in the market. Gold, Swiss Francs and higher quality bonds rose to the top of our buy list. I might add that due to parabolic moves up, gold and US Treasuries are getting very over valued; I will probably begin reducing these positions once again very soon.

Due to the differences in folio weightings in GWM Model Portfolios, our more conservative GWM models are out-performing our more aggressive models.

Year-to-Date performance charts for Golden Years and the In-Betweener are shown below. You will note that we are gaining daily.





* Performance reports are generated from actual client accounts housed at our lead custodian, Folio Institutional. Due to inherent constraints, performance will vary for accounts held at Pershing, Rydex and Monument Advisors.


This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.


Click the text link below to receive a Free Subscription to the GWM Newsletter and Gerritz InSights Blog

http://www.gerritzwealthmanagement.com/gwm-personal-portfolio-management-newsletter-and-blog-signup/











Wednesday, August 10, 2011

Golden Years Model Portfolio YTD Performance 08 09 2011


GWM OPEN FOR BUSINESS

Refer a Friend
and Help Save Their Nest Egg!


"Tell them about the advantages of using
a Personal Portfolio Manager
as opposed to a broker, bank or credit union."


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Free Subscription to the GWM Newsletter and Gerritz InSights Blog

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Tuesday, August 9, 2011

The Bulls Fight Back

There was a 600 plus point intra-day swing in the Dow Jones Industrial Average today. An ugly battle was waged between the bulls and bears. The bulls ended up winning the skirmish. If they continue to dominate in the days ahead, today will be considered a reversal day. If we then develop a series of higher highs and higher lows going forward investors will believe that the longer term uptrend has resumed and quickly chase the market higher. Investor are more likely to buy in an uptrend. I was encouraged by today’s action, but follow through is required for me to gain enough confidence to put money back to work in stocks. There is an old wall street saying that says: Don’t try to catch a falling knife.

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Sunday, August 7, 2011

CASH IS KING

The Stock Market is in a state of chaos. I feel it would be non-productive to risk both account capital and psychological capital to either try to catch the initial bounces,as  they will more than likely be faded, or to try pick a bottom.  Playing with fire is a fool's game.

Based on how the big picture develops this coming week, I may buy back some gold. I will also review our bond holdings, most likely adding to positions on any weakness brought on by the US Debt downgrade.

I have decided it is best to go into shut-down mode for the moment.  I will be blogging much less, if at all, for the time being. I'll let you know when we get some clarity again.

Now is the time to just sit back, relax and ignore the financial turmoil.




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Friday, August 5, 2011

Standard & Poor’s Downgrades U.S. Credit Rating

The U.S. credit rating was downgraded today. Standard & Poor's made the announcement late Friday that it has cut the US long-term rating from triple-A to AA+.
Based on a Wells Fargo analysis of a possible debt downgrade I don't think much more than a brief and small pullback in bond prices will occur.
Even before the downgrade was announced the bond market was under a bit of pressure today. As a result we gave back some of the gains made yesterday.

Technicals:
 
A credit rating of AA + still is rated as 0% risk according to the Basel II Accord, 2011


Below is a link to a July 28, 2011 Wells Fargo report titled "Understanding the Consequences of a U.S. Debt Downgrade."


Thursday, August 4, 2011

Running with the Bears




Ride the Bull and Avoid the Bear

GWM open for business

The easiest way to introduce a friend or relative to the benefits of Personal Portfolio Management is to send them a link to the GWM website.





Silver Stopped Out

We got stopped out of silver as a quick reversal sent prices lower.

I sold gold (gld) as a pre-emptive move. Reason for selling:

1. Regulators are threatening to raise margin requirement.
2. Gold is vulnerable at these levels in light of the steep market sell off today.
3. Price declining.
4. We can always buy it back (never fall in love with an investment.)
5. Gold my be sold off as liquidity is raised to meet margin calls.


Gold timing chart
Gold in overbought region - good time to take profits given the fact that the Gold/US Dollar ratio is rising.







The Dow was down more than 500 points on the day.




This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.








Wednesday, August 3, 2011

Golden Years Out-Performance YTD

You may have been surprised that the GWM Model Portfolios actually made money the last couple days while the market in general tanked. The majority of our retired investors have chosen the Golden Years Model Portfolio because they would rather not to have to worry about their investments in these turbulent times.

Below is a chart comparing the year-to-date performance of the Golden Years Model Portfolio to the S&P 500. Notice that yesterday, while the S&P lost over 2%, Golden Years gained about 1/2%.

For the year the S&P 500 Index is up less than 1% - Golden Years is up 2.70% YTD. We have accomplished this return with a mere fraction of the volatility of the market in general.

(Click on chart for easier viewing)




The GWM Market Direction Model (MDM) is now in cash. The current oversold condition of the market would suggest a bounce coming soon. We will not attempt to play that potential bounce at this time. The trading range lower-support-line has been breached to the downside on heavy volume. Moreover, the S&P is now below the 200 day moving average (DMA), a further negative. This may have invalidated the trading range. Because the MDM is in cash our Reversion-to-the-Mean strategy mentioned in The Gerritz Letter is tabled for the moment.



* All Model Portfolios have no exposure to equities at this time, with the exception of the Permanent Porfolio fund (PRPFX , a fund that holds gold, silver, treasuries and some growth stocks.



This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.







Tuesday, August 2, 2011

Market Comment 08 02 2011



On Monday the market gapped higher based on an expectation that a resolution to the US debt ceiling crisis  was at hand. The market began to fade that gap from the start of trading. About an hour later we got the news that the ISM numbers (a measure of industry productivity) were far worse that expected. The market then not only gave back all the gains but went on to loose another 60 S&P 500 points.

The fireworks in Congress were really a smoke-screen hiding the real problem for the market; it's the economy stupid. The ISM numbers were revised down to just above 50; a reading below 50 represents a contraction. Can you say double dip?

So today as they pass the debt ceiling bill the market falls by over 250 Dow points. The market has now been down for 8 days in a row. This has not happened since the 1970's.

The next critical data point is the employment report due out on Friday. The market seems to be discounting a bad number here as well.

The small equity positions we actually held were stopped out in the last couple days. (XOP, XES, RWX, BJK, IWM, RSX) See Smart Stops table below:

(Click on chart for easier viewing)


 

Strong performance in our new bond holdings, Swiss Francs ETF (FXF), and gold ETF (GLD) not only protected us, but helped deliver positive returns today.

I will be looking to the GMW Market Direction Model (MDM) for a potential signal change. We have been getting close to a medium-term sell or short signal.




This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.