Wall of Worry

Having trouble letting your winners run?

Perspective helps.

 

” The thinking is that any time stocks reach a new high it must mean that we are close to a peak that will surely bring the market crashing down. That is always a possibility, of course, but investors in stocks have to remind themselves that they will see many highs in a lifetime of investing. Generally speaking, stocks go up most of the time. A few of those highs will be temporary peaks but most will simply lead to even more highs down the road.

For example, looking at over 100 years of data on the Dow going back to 1915 shows that stocks have had 1,252 highs. That works out to an average of about 12 new highs every year. Assuming the average investor is in the markets for 40 years, that would be almost 500 highs in a lifetime of investing in stocks.”

– Ben Carlson

http://awealthofcommonsense.com/2017/03/all-time-highs-are-usually-followed-by-all-time-highs/

“Diversification as a hedge against your own overconfidence and inability to predict the future” – Ben Carlson

There are those who will tell you that the most important part of investing is to be comfortable with the risk you are assuming.

That makes little sense to me.  The most important part of investing, to me, is knowing and defining the risk.  Investing is never comfortable.  I cannot predict the future.

How have your numbers been in recent years?

Are you doing better than a simple buy and hold strategy?  Are you content to do worse in order to have some sense of control over the future?

These are questions worth pondering.

http://awealthofcommonsense.com/2017/03/updating-my-favorite-performance-chart-for-2016/

Looking for Longer Term Holdings With Income?

The following stocks are on my buy list.

The charts look solid, they pay a respectable dividend, and you can hold with a doomsday stop in case the world falls apart, as it did in the financial crisis 10 years ago.

Remember those days when you could get 5% just for parking dough in a money market account?

Those days are not coming back tomorrow, but some of these holdings are a good substitute.

CCI

INTC

VZ

T

SO

VTR

IBM

CSCO

DUK

 

 

Crystal Ball

The below article is an excellent read.

There are many clichés, such as a broken clock is right twice a day, etc. to describe how true and how difficult it is to be honest with yourself as it relates to your investing.

To get better, it is imperative to look back at your decisions, figure out what worked and what did not, and why.

Some good insights here:

 

http://awealthofcommonsense.com/2017/02/my-too-hard-pile/

 

IWM Short

The market is in an uptrend.  You should never short a quiet market.

Yet, if the IWM does not get a push to the upside soon, I would expect a sharp and significant break down short term.  This is a really long consolidation being put in, too long perhaps.

With that in mind, if you are comfortable with short term trading and have the discipline to place and use buy stops, you may want to consider putting in a short on the IWM with a buy stop at recent IWM highs.

I plan on going with a TZA long approach; small cap bear x 3.

This is short term.  The market trend is still very much up, up, and away.

DDD putting in a bottom?

The three dimensional printing space seems to be putting in a bottom.  It was hot a while back, and then got crushed.

With the momentum of the market moving higher, perhaps this is a good risk reward opportunity.

I like the  DDD chart on daily and weekly views.  I started a position today.

 

Sell Half

I have several positions with double digit returns that need pruning.

Do not think the market just goes up, it also goes down.  Since I have no idea where this will stop, the market can have a 20% up year for all I know,  I just prune some when positions are sporting double digit gains and everyone is happy.

When people are content with the market, and you have profits, take some off the table.

When people are miserable and scared, deploy cash.

Straw hats in winter.

 

 

 

Melt Up?

There has been no panic buying to chase the market higher, or a rush for the exits as we enter the last full week of January trading.

Some sectors are seeing profit taking, such as financials, but it is orderly and measured.  Bullish in my opinion.  Next move should be in the direction of the predominant trend which is up.

I am adding to my best long positions with caution. Capital preservation is my primary goal, but cash is the wrong call, in my opinion.

Do not call the top, stay strong and stay long.