I’m Back…Mid November Update

November 14, 2013

Please don’t ask what happened.  I’m not a techie, and I don’t point fingers.. ..especially when I don’t have the facts.  Suffice it to say my nephew did all the heavy lifting to get me back up and I am very thankful he is a techie with  very wide and strong web relationships.  Of course, being vulnerable is not my strong suit,  and for sure I hate to look in the mirror and say ” there stands a mendicant”.   So, I’ll be looking to do what I normally do….look for an opportunity to seize the controls and create a new Blog with me in nominal and functional control.

Now for the Update…..  If you had invested in VTI,  December 30, 2011 and were still holding it, you have 476 days invested without a sell signal and you are ahead 47.91%.  This trade represents the essence of trend trading….” stay with the trend till the end “.  To me its a very reasonable compromise between day trading and buy and hold.  You don’t get whipsawed on a daily basis ( or more often ! ) and you don’t suffer losses such as those that took place after the dot. com boom of 2000 which saw the S&P 500 lose 47% and the Nasdaq almost 80%.  It happened again during the financial crisis years of 2007 – 2009  which saw the S&P 500 sell off 56% over 19 months.

I wish I could say I have been holding VTI ( now the worlds largest ETF ) since December 30, 2011.  I didn’t  become a holder until early this year and  on December 30,2011 my perspective on the market was still evolving and I was probably closer to joining the ” Sit In on Wall Street ” than investing  in what I saw as a crumbling ” wall of worry ” ( see Archives  my Post of November 13, 2011 – ” Its November but Risk Off “).

But, I have been attempting to get in step with VTI by dollar cost averaging into my present position after the end of each month.  My mandate is to not liquidate until VTI ends a month below its 200 day simple moving average.  At present VTI’s 200 day average is $84.04 and my average cost is $87.01. That means I would lose 3.4% if that occurred.  Of course, VTI could decline even more than 3.4% by month end, involving me in a greater loss as my entrance fee to joining the VTI trend trading club.  I’m willing to accept that, knowing I’m neither a loose emotional cannon nor tied to a buy and hold strategy that could wreck my investment program and destroy my confidence in the market.  As of now my potential loss is becoming less and less as the market drags the VTI moving average higher and higher.

There is a lot of noise out there right now and I’m doing my best to ignore it by keeping faith in my moving average methodology, watching the horizon for potential moving average crossovers. (  For instance if the 50 day moving average trend line penetrated the trend line of the 200 day moving average ) and of course, interest rates.  If medium and long term interest rates ( and the prospect of what is about to happen to them ) remain reasonably benign,  the sun will shine and the waves will continue to roll.  In my opinion, the biggest risk to this market will be the consensus seeing a change in Fed policy  after a Fed meeting.

 

Richard Maurice Gore

 

 

 

 

 

 

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