Friday, March 30, 2012

Daily Market Snapshot 03 29 2012

Daily Market Snapshot
The market has been under pressure going into the close of the quarter. A late day rally helped save the day.

Trendline Analysis

The market has struggled at these higher levels.

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.

Friday, March 23, 2012

Palos Verdes Investment Conference

I will be attending the semi-annual HGSI investor conference at the Rolling Hills Estates Library in Palos Verdes, CA this weekend.

Ian Woodward and Ron Brown, the conference leaders, will be hosting the event as usual. HGSI members, Fred Richards, Harvard professor/investor, Dr. Jeffrey Scott, oncologist/investor and Gil Morales, money manager/investor, will make special presentations, delivering their views on the economy, the markets and investment strategies.

We usually have an intimate group of around 40 or 50 avid investors in attendance. The Palos Verdes HGSI conference is second to none in my book. The brain power and wealth this group represents is immense. Add to this the fact that the aforementioned special speakers are not compensated in any way. The meeting is all about sharing ideas, insights and investment strategies freely.


Daily Market Snapshot 03 22 2012

Daily Market Snapshot

We are approaching the stalemate condition in the market. This indicates a stand-off
in the battle between the bulls and the bears.

The market has been experiancing a mild pullback. Volume has been low, suggesting that investors are not rushing to sell positions. I began lightening up on exposure last week.

Since I remain bullish, I am preparing my buy list.

Thursday, March 15, 2012

Daily Market Snapshot 03 1512

Positive Day

GWM performance was mixed today. None the less, the market remains bullish.

Market Direction Model

More Green

Flexible Income Folio

The income oriented sectors of the market
continue to perform poorly.

Trendline Analysis

It seems as though investors are shunning the income oriented investments and the bond sector, in favor of equities in general. The Flexible Income folio continues to act as a bit of a drag on our overall performance. I may pare back some of our Flex Income folio holdings if the trend breaks down further.

Not too bad yet, but worthy of watching closely.

Tuesday, March 13, 2012

The Dow Jones Industrial Average Closes Above 13,000

Trendline Analysis

Click chart for easier viewing
Daily Market Snapshot

Click chart for easier viewing

Market Direction Model

Click chart for easier viewing

By now you are familiar with our Market Direction Model. It turned mostly green with today's big move up in the market, a bullish sign.

The table to the left of the MDM, a part of the analysis that I rarely post, provides me with some very useful information. Strong upward movement in the nine US markets we track cause these cells to be painted blue. The initial swath of blue, painted on March 7th, was the green light for me to begin redeploying capital in anticipation a market reversal to the upside. As a result of this early signal, all model portfolios were approximately 85% invested prior to today's big rally. "Winning" (a Charlie Sheen quote).

GWM Model Portfolio Holding
One day percentage gains

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.


Tax Alert - Accessing your 2011 Fees Paid Report

The combined GWM Management fee and Folio custodial fee reports are posted in your online Folio file-cabinet. They can be found under the Advance Notice IA Billing report heading at the bottom of your online file-cabinet page. Scroll all the way down.

All fees charged IRA accounts are done on a before tax basis. IRA related account fees would only be deductible if you paid these fees separtely by check and you did not.

Fees charged for taxable accounts are deductible, but are subject to a threshold set by the IRS. Provide your tax preparer with the 2011 Quarterly fee reports located in your online file cabinet (taxable accounts only).

Follow the procedure below to locate your billing reports.

Click on graphic for easier viewing.

Click on graphic for easier viewing.

Call me if you have any questions.


Saturday, March 10, 2012

GWM Model Portfolio Stock Holdings

History has shown that up to seventy percent of a portfolio's performance can be attributed to market direction and sector selection. This is precisely the reason we give so much weight to our Market Direction Model and Sector Analysis. We want to have the wind at our backs when investing.

There are a myriad of investment styles to choose from when it comes to stock selection. GWM uses the "Top - Down" investment style, market direction 1st, sector section 2nd and, finally, stock selection.

I have found that I do not have the personal traits required to be a value investor. Value investing is great for those with the patience of Job and the ability to watch their investments decline as the market advances. I vastly prefer the "Relative Strength' approach to investing. If possible, I want to be invested in stocks and sectors that are outperforming the benchmark S&P 500. I also like stocks that are being accumulated by the "Large Player" portfolio managers: institutional sponsorship is important; they are the ones with enough money to move stocks and the market.

Currently our model portfolios have positions in the following stocks (partial list). They all have the following characteristic:

Institutional Sponsorship as indicated by high volume large player share accumulation (green line)

Strong Buy ratings by analysts

Relative market outperformance (second chart)

Volume and Price Chart
Effective Volume Charts by Pascal Willain

Click the chart for easier viewing

Relative Y-T-D Performance

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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.

Friday, March 9, 2012

GWM Golden Years Model Portfolio - Most Retirees Prefer Low Volatility

GWM Personal Investment Management has delivered stable, low volatility returns to our investors for many years. The GWM Golden Years Model Portfolio, in particular, is well suited for the conservative investor.

To many retired investors, risk is a four letter word.

Bank CDs (certificate of deposit), government bonds and money market accounts provide little return in the current economic environment. Additionally, savers loose purchasing power as the value of the US Dollar is being desimated by the Federal printing presses.

At GWM, we believe that risk should be managed, not avoided.

Our results speak for themselves. Most professional money managers lost money in 2011 due to the extreme volatility of the markets. Between March 09, 2011 and March 08, 2012, the GWM Golden Years Model Portfolio not only beat the market, but did so with a mere fraction of the volatility.

Golden Year Model Portfolio

I encourage you to tell your friends and family about the benefits of
Model Based Personal Investment Management.

Thursday, March 8, 2012

Daily Market Snapshot 03 08 2012

Daily Market Snapshot

Gains held for two days. This is a plus.

The Woody Indicator
(Volatility Indicator)

Volatility came back into safe zone.

Market Direction Model
Improvement across all major US markets.

The Correction seems to have been shallow and short-lived. After adding positions in most folios, we are now about 50% invested. A lot of market moving news is due out tomorrow, US employment report, Greece debt resolution deal, China decision on interest rates, etc

If the headline news is favorable, the markets should stage a nice advance tomorrow. If we get bad news, the market will sell off. I am expecting good news.

Wednesday, March 7, 2012

2011 Folio Institutional 1099s for Taxable Accounts

2011 Folio Institutional 1099s for Taxable Accounts will be available no later than March 15th. According to Folio new government regulations is being blamed for the delay.

These 1099s are delivered to your online filing cabinet only; they are not mailed to you via regular US Mail.

You can check your Folio Client online filing cabinet periodically to see if the 1099s show up. I have outline the proceedure for checking your filing cabinet below. Click on the screenshots to enlarge them for easier viewing.

Step 1

Step 2

Call me if you have any questions.


Tuesday, March 6, 2012

Daily Market Snapshot 03 06 2012

Daily Market Snapshot

Big downside move in the market.

The Woody Indicator
(Volatility Indicator $VIX)

Volatility spiked up into Caution Zone.

Market Direction Model

The MDM has turned predominently red, a sell signal.


Gold and gold miners continued to tumble as well.

I think the charts and graphs above paint a pretty clear picture of the current status of the markets. If it looks like a duck and quacks like a duck, it is a duck, or in this case a market correction.

I have been reducing our exposure to risk progressively as this downturn has developed. On Monday, I bought the 2x inverse gold miners ETF in the Long/Short folios; a spike up in these shares helped provide cover and bought me time to  pare back our model portfolio holdings on Tuesday morning. All Model Portfolio now have very little risk exposure.

Tomorrow the market should bounce.  My market correction call will be confirmed if the market fails hold these potential gains into Wednesday's close. If that is the case, I will once again be inclined to buy inverse positions in the long/short folios.

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, March 5, 2012

Daily Market Snapshot 03 05 2012

(Click on the charts for easier viewing)

- Daily Market Snapshot -
Bears remain in control.

The trend line going back to
the middle of last December has been broken.

Market Direction Model
shows further deterioration.
 Since a near term correction appears to be more likely, I have taken a more defensive posture in all model portfolios.

New America Folio - Latest Purchase

Fusion-io (FIO)

Geek info:

Fusion-io is a pioneer of a new storage memory platform that significantly improves the processing capabilities within a data center by moving process-critical, or active data closer to the CPU where it is processed. Called shared data decentralization, this significantly reduces latency while increasing data center efficiency. Fusion’s integrated hardware and software solutions leverage non-volatile memory for enterprise-grade performance, reliability, availability and manageability.

Analyst have a $50 price target on Fusion-io. I bought it on a 4%+ pullback today. It is currently priced around $31 to $32. This is a speculative and volatile stock that has real potention. It has contracts with Apple and other large companies. Its products are on the cutting edge; for end users think Facebook and cloud computing.

Lt. Chris Gerritz, electrical and computer engineer and GWM Advisor Associate, was the first to tell me about this amazing technology, solid state hard drives. I might add that Stephen Wazniac, Apple co-founder, is the head scientist at Fusion-io.

Fusion-io product manager, Vincent Brisebois provided an overview of the company’s focus for its supercomputing audience for us:

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, March 3, 2012

Classic Volatility Squeeze

Market Direction Model

The market in general has been flat for the last month. The Market Direction Model has changed from green to yellow by and large, in other words, from bullish to neutral.

The market in general is mostly neutral, however, the
Russel 2000 (small cap index) is bearish (red).

As I mentioned in the March issue of The Gerritz Letter, the small cap stocks often lead the markets higher or lower. With the small caps having turned down, we are now more vulneralble to a potential pullback senario playing out. I also mentioned that a spike in volatility would be the earliest warning that a market correction was at hand. At the moment volaltility is extremely low in the Russel Index.

Volatility Sqeeze

Bollinger Bands expand and contract as volatility goes up and down. A volatility squeeze occurs when volatility remains very low for a period of time.  It is only a matter of time before volatility begins to expand once again. The Woody Indicator (volatility indicator) quickly reacts to any changes in volatility; consequently, it produces very timely buy/sell/sell-short signals.

Low Road Senario:

If we get one or two 100 Dow point down days, volatility will spike and we will have our market correction.

High Road Senario:

Buyer continue to buy small dips and the market continues its slow grind higher.

(Click on chart for easier viewing, Then click the white X in the upper right corner to return to the blog)

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, March 1, 2012

The Gerritz Letter

The March issue of The Gerritz Letter has been published. It should be in your email inbox now. It can be viewed on the GWM web-site as well.

Stephen Gerritz