Forty Five and Counting

September 17, 2011

With forty five days remaining until November 1, we are taking VXX profits and using part to help fund a protective portfolio re-alignment.

On May 28, 2011, with $ 1,000,000 in cash, we had 3 choices.

#1 – Stay fully invested in the equity market. Usingthe S&P 500 as a market surrogate, we would now be down $90,000, unrealized, offset by $6,700 in dividends resulting in a net negative result of  $83,000 – ( minus 8.3% ) ….or

#2 – Totally withdraw to the sidelines and go to cash via money market funds of banks or brokers, watch our capital earn virtually nothing and be eroded by inflation.

#3 – Design a $1,000,000 May / Go Away Portfolio, ( which we did ), and watch it lose only $171 – while earning interest and dividends of $ 10, 929 for the 4 months ( positive 3.28% per annum )

Since May 28 the May / Go Away design has beaten the S&P 500 by 11.58%.

Call it luck, or good timing or we can just say maybe the ” Play till May ” refrain continues to have some relevence as an action guide.

For us, there is nothing slavishly compelling about this idea. We say Go Away in May unless there are compelling techno / fundamental reasons to stay invested. We will re-enter the market in November providing there aren’t compelling reasons to be defensive.

We are now ( unequally % ) invested in the symbols shown below. To determine our percent allocation for each symbol…just ask.

As always this information is free to family, friends, former associates and those new to self directed IRAs.

ACC, AGNC, ALD, BIV, BND, BSV, GLD, LQD, NLY, PSA, RYU,
SH, VCIT, VCSH, HYS

RMG@RichardMGore.com

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