Going All The Way….. To Cash

December 20,2011

This market is pure torture for an impatient impulser such as I am.

To counteract these character flaws I have implemented mechanical triggers which require dicipline and daily updates.

I believe we will be  in a secular bear market until 2013 / 14.  That is the overall top down view.  To operate profitably in this kind of market  means buying wisely to squeeze the last ounce of profit out of the intermittent bull reversals that will occur within the confines of  the downsloping trend line of the  bear market.

As of now, I am liquiding my remaining positions in the defensive  ” May Go Away”  portfolio.

The net result from  May 28 is an overall realized loss of  $27,788 offset by dividends of $ 11,861 making for a total net return of  negative 9/10ths of 1% compared to a profit on the S&P 500 of  positive 7/10ths of 1%.

So, during 2011,  I took $116,000 profits off the table May 13 and have given back $15, 927 during  what I thought would be a dangerous seven  months in the market…..and dangerous it was !   For me, since May 28, doing something has been 9/10ths of 1 % worse than doing nothing.  Am I getting aggressive now ? ….. No…  As a retiree I have no option except to burn capital knowing that the alternative is to lose money AND burn capital.

I am all in cash as of today and I want to invest these funds in ten all weather ETF symbols.  But, today,  the average price of the portfolio is  6.6% above where I would be willing to invest half  my funds and 12 % above where I would invest the balance . 

I just need to be patient.     Grrrrr!

Richard, Richie, Dick and Smiley from Woodlawn

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