Saturday, March 18, 2017

Career Path and Expectations Explained in a Graph

I found this on the Internet under Life Explained in Graphs:



This one gave me a good chuckle.

For more on Reflections and Musings, check back  Saturdays for a new segment.

This is not financial or career advice. Please consult a professional advisor.

Copyright © 2017 Achievement Catalyst, LLC

Thursday, March 09, 2017

Happy 8th Anniversary

Today marks the eighth anniversary of the bull market that started on March 9, 2009.

It wouldn't surprise me to see the bull market end in the next year, but then again, I've been expecting a an ending to occur since 2011.  I haven't been right yet, which isn't a bad thing.

For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2017 Achievement Catalyst, LLC

Wednesday, March 08, 2017

Waiting for Extreme Carnage Before Buying

"To the pain..." ~ Westley from The Princess Bride

I'm itching to buy, but I'm going to wait.

In 2013 (the tape tantrum) and 2016 (worst start to S&P in history), I started buying right away and endured a month of further decline.  Then for Brexit and the Trump election, I waited and missed the immediate rebound of 2 days and 6 hours.

I expect this time the decline will be longer and more drawn out for the following reasons:

  • The Fed is raising interest rates.   
  • Trump's honeymoon fading fast.  And Trump is running out of items that can be dealt with by executive order.
  • Too many stocks are near 52 week lows despite the indices being near all time highs.
  • The low bar of expectations for Trump is rising.
  • Obamacare repeal and replace proposal disappointingly is really Obamacare tweak and refine.  
  • And the Fed is raising interest rates.
So I will wait for the market to become painful before buying.  Currently, I'm thinking of a 20% decline before doing most of my buying.  However, if a reversal occurs before 20% is reached, I may start buying.

Hopefully, I will be able to buy low.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2017 Achievement Catalyst, LLC

Monday, March 06, 2017

Preparing for a Really Ugly Market Downturn

While I don't know when the markets will turn down significantly, I want to be prepared for the inevitable.   Here are my two ugly market scenarios:

The first scenario, which some may expect, is the market will fall quickly, 10, 20, or maybe 30+% , over a couple months and then recover.  This scenario is usually painful, but short lived.

The second scenario, which others may expect,  is the market falls slowly over 6 months to two years. This scenario is usually painful for those expecting the first scenario and stay in the market or put more fund in while waiting for the rebound. Since this scenario extends the pain for a longer period, this scenario is particularly ugly.

Over the past few years, we've reduced our equity exposure from about 50% to about 25%.  This has been done primarily by reducing our exposure to my company stock by 66%.   So this has reduced our risk in two ways.

So if the stock market falls significantly, our downside will be about 25% of the market indices, which gives me comfort.   Of course, if the market rises significantly, we will only experience 25% of the gain in market indices.  However, given the current uncertainty of the markets, it is a trade off that I am happy to make, so that I can sleep better at night.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Copyright © 2017 Achievement Catalyst, LLC

Wednesday, March 01, 2017

Time for Investing Discipline

Despite numerous predictions of a market rout if Donald Trump was elected, the market has done exactly the opposite, rally about 15% since the election.    This totally unexpected market rally is giving me the opportunity to do some portfolio adjustments.  

Dispense with Losers.
First, I'm am selling some of the investments that have gone down or stayed flat.    If they aren't rising in this market, these stocks are probably dead money.  I sold most of our retail stocks.   I've sold some oil stocks.   However, I'm still keeping many of my energy stocks despite their stalled recovery.  

Trim the Winners.
I am taking profits in some of our winning stocks.  For most, I am selling a partial position, for a few, I am selling the total position.   Mostly, I have been selling off part of some of my biotech positions.  In addition, I am also taking profits by trimming our managed accounts to the minimum investment amount.

Identify Trading Opportunities.
There appear to be certain sectors and stocks which are taking off in short bursts.  I will experiment with buying small positions in these advancing stocks and then selling them after 10-50% gains.   This is purely a technical trading approach.  

Increase Cash for Future Buying Opportunities.
Some time in the future, the market will correct.   I will be ready to make some additional purchases in our core position, or adding more dividend paying stocks.

I don't sense a correction yet since there is little exuberance.  At the same time, I don't see a lot of conviction for this rally.     So we will continue to keep a base amount invested to participate in the rally, while waiting for correction to occur.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2017 Achievement Catalyst, LLC