We're making trades in the Conservative portfolio. You can view the trade specifics in the before and after (pre- and post-trade) tabs for the portfolio.
We are not selling any funds that would incur a short-term transaction fee charged by the fund company as we have owned these funds for quite some time. You, however, may have purchased these funds at different times for your own account.
<b>Why we are making these trades:</b>
The stock market now officially in bear market territory – down 20% from the peak in 2007. As we have been writing for much of the last year, fund investors have become a little too enthusiastic– notably by moving large amounts of money into foreign funds. We have cut back our stock allocations and higher risk bond allocations across our portfolios and have been running relatively conservative portfolios in all of our model portfolios
We have been watching fund investor flows closely over the last few months as the market has fallen sharply and made some quick, short-lived recovery attempts. As we <a href="http://maxadvisor.com/newsletter/index.php">noted last month</a>,, fund investors have been buying high and selling low – increasing their investments around Dow 13,500 and pulling money out under 12,000.
While the recent drop has been fast, we are quite certain that when the June numbers are in it will show outflows for funds, meaning this is a good time to increase our risk levels. We are adding back higher-risk bond funds (which have slid in recent months and are down quite a bit since we last owned junk bonds in our portfolios) and increasing our overall stock allocation. We are making trades and increasing our risk level in all portfolios.
Specifically, we are adding a junk bond fund (Metropolitan West High Yield Bond - MWHYX), a Japan fund (Vanguard Pacific Stock ETF - VPL), a telecom sector fund (Vanguard Telecom Services ETF - VOX), and a new global fund (Dodge & Cox Global Stock - DODWX). Check each portfolio area to see which goes where.
We actually owned Vanguard Telecom Services ETF – VOX in several of our portfolios and rode it for a 40% plus gain in just over a year. Telecom stocks were noticed by performance chasing investors, and we sold our stake near the fund’s peak. Vanguard Telecom Services ETF has since fallen back to about where we bought it the first time.
In our more aggressive portfolios we are adding some new short funds – a speculative strategy. We are going to try to profit from what we consider to be elevated values in emerging markets and commodities. This is a very high risk short term strategy. This includes inverse ETFs like DB Commodity Double Short ETN (DEE) and UltraShort MSCI Emerging Markets ProShares (EEV). We are using the double short ETFs largely because the ‘single’ short ETFs do not trade with high volumes – probably because gamblers like more action up and down.
We are also cutting down on more conservative bond funds and some older stock funds, and increasing our stakes in others.
Has the stock market hit rock bottom? Hopefully, but the market could easily fall another 10% or more. If it does we will likely increase our risk level further and even consider dropping bonds entirely from our higher risk portfolios.
We know these trades are hard to stomach for some investors. Most investors want to cut back on stocks after the market drops sharply – just as they want to increase their allocation after a big run up. But remember, our model portfolios have beat the S&P 500 since inception in 2002 by doing the opposite of what your gut tells you to do.
Please note: While you can place this trade at anytime, for performance tracking purposes we make all trades to our model portfolio on the last day of the month. These trades will take place in our model portfolios on Monday June 30th, 2008.
We're making trades in the Aggressive Growth portfolio. You can view the trade specifics in the before and after (pre- and post-trade) tabs for the portfolio.
We are not selling any funds that would incur a short-term transaction fee charged by the fund company as we have owned these funds for quite some time. You, however, may have purchased these funds at different times for your own account.
<b>Why we are making these trades:</b>
The stock market now officially in bear market territory – down 20% from the peak in 2007. As we have been writing for much of the last year, fund investors have become a little too enthusiastic– notably by moving large amounts of money into foreign funds. We have cut back our stock allocations and higher risk bond allocations across our portfolios and have been running relatively conservative portfolios in all of our model portfolios
We have been watching fund investor flows closely over the last few months as the market has fallen sharply and made some quick, short-lived recovery attempts. As we <a href="http://maxadvisor.com/newsletter/index.php">noted last month</a>, fund investors have been buying high and selling low – increasing their investments around Dow 13,500 and pulling money out under 12,000.
While the recent drop has been fast, we are quite certain that when the June numbers are in it will show outflows for funds, meaning this is a good time to increase our risk levels. We are adding back higher-risk bond funds (which have slid in recent months and are down quite a bit since we last owned junk bonds in our portfolios) and increasing our overall stock allocation. We are making trades and increasing our risk level in all portfolios.
Specifically, we are adding a junk bond fund (Metropolitan West High Yield Bond - MWHYX), a Japan fund (Vanguard Pacific Stock ETF - VPL), a telecom sector fund (Vanguard Telecom Services ETF - VOX), and a new global fund (Dodge & Cox Global Stock - DODWX). Check each portfolio area to see which goes where.
We actually owned Vanguard Telecom Services ETF – VOX in several of our portfolios and rode it for a 40% plus gain in just over a year. Telecom stocks were noticed by performance chasing investors, and we sold our stake near the fund’s peak. Vanguard Telecom Services ETF has since fallen back to about where we bought it the first time.
In our more aggressive portfolios we are adding some new short funds – a speculative strategy. We are going to try to profit from what we consider to be elevated values in emerging markets and commodities. This is a very high risk short term strategy. This includes inverse ETFs like DB Commodity Double Short ETN (DEE) and UltraShort MSCI Emerging Markets ProShares (EEV). We are using the double short ETFs largely because the ‘single’ short ETFs do not trade with high volumes – probably because gamblers like more action up and down.
We are also cutting down on more conservative bond funds and some older stock funds, and increasing our stakes in others.
Has the stock market hit rock bottom? Hopefully, but the market could easily fall another 10% or more. If it does we will likely increase our risk level further and even consider dropping bonds entirely from our higher risk portfolios.
We know these trades are hard to stomach for some investors. Most investors want to cut back on stocks after the market drops sharply – just as they want to increase their allocation after a big run up. But remember, our model portfolios have beat the S&P 500 since inception in 2002 by doing the opposite of what your gut tells you to do.
Please note: While you can place this trade at anytime, for performance tracking purposes we make all trades to our model portfolio on the last day of the month. These trades will take place in our model portfolios on Monday June 30th, 2008.
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We're making trades in the Conservative portfolio. You can view the trade specifics in the before and after (pre- and post-trade) tabs for the portfolio.
We are not selling any funds that would incur a short-term transaction fee charged by the fund company as we have owned these funds for quite some time. You, however, may have purchased these funds at different times for your own account.
<b>Why we are making these trades:</b>
The stock market now officially in bear market territory – down 20% from the peak in 2007. As we have been writing for much of the last year, fund investors have become a little too enthusiastic– notably by moving large amounts of money into foreign funds. We have cut back our stock allocations and higher risk bond allocations across our portfolios and have been running relatively conservative portfolios in all of our model portfolios
We have been watching fund investor flows closely over the last few months as the market has fallen sharply and made some quick, short-lived recovery attempts. As we <a href="http://maxadvisor.com/newsletter/index.php">noted last month</a>,, fund investors have been buying high and selling low – increasing their investments around Dow 13,500 and pulling money out under 12,000.
While the recent drop has been fast, we are quite certain that when the June numbers are in it will show outflows for funds, meaning this is a good time to increase our risk levels. We are adding back higher-risk bond funds (which have slid in recent months and are down quite a bit since we last owned junk bonds in our portfolios) and increasing our overall stock allocation. We are making trades and increasing our risk level in all portfolios.
Specifically, we are adding a junk bond fund (Metropolitan West High Yield Bond - MWHYX), a Japan fund (Vanguard Pacific Stock ETF - VPL), a telecom sector fund (Vanguard Telecom Services ETF - VOX), and a new global fund (Dodge & Cox Global Stock - DODWX). Check each portfolio area to see which goes where.
We actually owned Vanguard Telecom Services ETF – VOX in several of our portfolios and rode it for a 40% plus gain in just over a year. Telecom stocks were noticed by performance chasing investors, and we sold our stake near the fund’s peak. Vanguard Telecom Services ETF has since fallen back to about where we bought it the first time.
In our more aggressive portfolios we are adding some new short funds – a speculative strategy. We are going to try to profit from what we consider to be elevated values in emerging markets and commodities. This is a very high risk short term strategy. This includes inverse ETFs like DB Commodity Double Short ETN (DEE) and UltraShort MSCI Emerging Markets ProShares (EEV). We are using the double short ETFs largely because the ‘single’ short ETFs do not trade with high volumes – probably because gamblers like more action up and down.
We are also cutting down on more conservative bond funds and some older stock funds, and increasing our stakes in others.
Has the stock market hit rock bottom? Hopefully, but the market could easily fall another 10% or more. If it does we will likely increase our risk level further and even consider dropping bonds entirely from our higher risk portfolios.
We know these trades are hard to stomach for some investors. Most investors want to cut back on stocks after the market drops sharply – just as they want to increase their allocation after a big run up. But remember, our model portfolios have beat the S&P 500 since inception in 2002 by doing the opposite of what your gut tells you to do.
Please note: While you can place this trade at anytime, for performance tracking purposes we make all trades to our model portfolio on the last day of the month. These trades will take place in our model portfolios on Monday June 30th, 2008.
We're making trades in the Aggressive Growth portfolio. You can view the trade specifics in the before and after (pre- and post-trade) tabs for the portfolio.
We are not selling any funds that would incur a short-term transaction fee charged by the fund company as we have owned these funds for quite some time. You, however, may have purchased these funds at different times for your own account.
<b>Why we are making these trades:</b>
The stock market now officially in bear market territory – down 20% from the peak in 2007. As we have been writing for much of the last year, fund investors have become a little too enthusiastic– notably by moving large amounts of money into foreign funds. We have cut back our stock allocations and higher risk bond allocations across our portfolios and have been running relatively conservative portfolios in all of our model portfolios
We have been watching fund investor flows closely over the last few months as the market has fallen sharply and made some quick, short-lived recovery attempts. As we <a href="http://maxadvisor.com/newsletter/index.php">noted last month</a>, fund investors have been buying high and selling low – increasing their investments around Dow 13,500 and pulling money out under 12,000.
While the recent drop has been fast, we are quite certain that when the June numbers are in it will show outflows for funds, meaning this is a good time to increase our risk levels. We are adding back higher-risk bond funds (which have slid in recent months and are down quite a bit since we last owned junk bonds in our portfolios) and increasing our overall stock allocation. We are making trades and increasing our risk level in all portfolios.
Specifically, we are adding a junk bond fund (Metropolitan West High Yield Bond - MWHYX), a Japan fund (Vanguard Pacific Stock ETF - VPL), a telecom sector fund (Vanguard Telecom Services ETF - VOX), and a new global fund (Dodge & Cox Global Stock - DODWX). Check each portfolio area to see which goes where.
We actually owned Vanguard Telecom Services ETF – VOX in several of our portfolios and rode it for a 40% plus gain in just over a year. Telecom stocks were noticed by performance chasing investors, and we sold our stake near the fund’s peak. Vanguard Telecom Services ETF has since fallen back to about where we bought it the first time.
In our more aggressive portfolios we are adding some new short funds – a speculative strategy. We are going to try to profit from what we consider to be elevated values in emerging markets and commodities. This is a very high risk short term strategy. This includes inverse ETFs like DB Commodity Double Short ETN (DEE) and UltraShort MSCI Emerging Markets ProShares (EEV). We are using the double short ETFs largely because the ‘single’ short ETFs do not trade with high volumes – probably because gamblers like more action up and down.
We are also cutting down on more conservative bond funds and some older stock funds, and increasing our stakes in others.
Has the stock market hit rock bottom? Hopefully, but the market could easily fall another 10% or more. If it does we will likely increase our risk level further and even consider dropping bonds entirely from our higher risk portfolios.
We know these trades are hard to stomach for some investors. Most investors want to cut back on stocks after the market drops sharply – just as they want to increase their allocation after a big run up. But remember, our model portfolios have beat the S&P 500 since inception in 2002 by doing the opposite of what your gut tells you to do.
Please note: While you can place this trade at anytime, for performance tracking purposes we make all trades to our model portfolio on the last day of the month. These trades will take place in our model portfolios on Monday June 30th, 2008.