Archive for May, 2018

547 And Counting

Thursday, May 31st, 2018

May 31, 2018

Following SPY can show you how boring investing can be, even if all hell is breaking out over Italian debt, tariffs etc.

That’s how it goes with SPY.  You can just buy and hold knowing every portfolio manager and hedge fund analyst is breaking his butt just to equal your performance.  Why pay anyone a commission or a handling fee when you can own a passive investment that will perform as well as the USA stock market’s top 500 stocks and trades as if every symbol in the market was compressed into one share.  You can trade as little as one share or a thousand for the brokerage fee of approximately $5 per transaction….total !

For the month ending May 31, 2018 ” SPY ” closed at $271.25 which is  2.98% above SPY’s 200 day moving average.  SPY price above 200 day moving average on last day of any month,  means you can leave your SPY investment undisturbed as it has been for the past 547 days, returning 37.97% since the buy signal on March 31, 2016.  Of course, year to date SPY has appreciated only 1.64%, from  $266.86 on January 1 to $271.25 now.   That is what the top 500 companies in the USA have achieved year to date.  Before this year is over, you will either have been told by the 200 day model  to get out of the market, or the market will have appreciated or stayed the same and 90% of the analysts will have performed worse than you,… your lack of knowledge, interest or time notwithstanding. Even Warren Buffett says SPY is the benchmark nut to crack.

So you might ask, why would someone even bother to own any domestic stock other than SPY.?  The answer is a combination of a quest for recognition ( applause ), a better return ( but at more risk ) and higher fees to you for your advice ( if you are part of the fortunate 10% to outperform SPY ).

My reason for picking investments other than SPY is that it gives me a sense of security to know that I am smarter than the market.  So, I use SPY just as an indicator that its safe to go offshore for bigger fish .  I leave the market when the SPY 200-day month end signal says step aside or…. lets beach this sucker !.

As of yesterday’s close, I was 10.8% above even for the year, which allows me to stand admiringly in front of the mirror with a smile on my face.  If  I were down 10.8%, I’d be trying like the devil to find out where I went wrong and that could have been as simple as ignoring the old adage ” play till May, then go away “.

I know that when I venture beyond SPY, I am leaving the relative safety of market risk and taking on an ocean of specific risk.  This means you better learn how to pick stocks and when to say adieu….understanding that no one ever went to the poor house taking a smaller profit.  Or being like a boxer. Hit, but don’t get hit !

Some of the stocks I am invested in are AMZN, FB, MSFT, TWTR, MA, MCO. JPM, GOOG.

Some of the ETFs I am invested in are SPY, DIA, QQQ, MDY, IWM, ITA, SBIO, XBI.

Oh yes, one final word. I don’t have a license to give financial advice, so take all of this free financial chatter as being worth zero.

Richard Maurice Gore