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Blogging to you from the Northeastern Badlands of The County of Lake, in the state currently known as Fatmanistan, DEEP DEEP DEEP DEEP DEEP inside the heartland of the Banana Republic formerly known as the USA, WELCOME TO THE NEXT CHAPTER! WARNING! ALL FORMS OF SOCIAL MEDIA ARE ADDICTIVE; EXCESSIVE USE MAY LEAD TO MENTAL HEALTH DISORDERS, REDUCED JOB PRODUCTIVITY, INSOMNIA, SOCIAL ALIENATION, GENITAL ULCERS, BLINDNESS, POLITICAL EROTICISM, AND / OR DEVIANT FUNAMBULISM. NOTICE: NO GUNS OR AMMUNITION ARE FOR SALE VIA THIS BLOG. (No, I will not trade my Colt Python for some lubricious adventures with your trophy wife and a future first-round draft pick.) CAVEAT: This blog is not suitable for viewing while at work, while inside a public library, while inside any public or private school, or while inside any public or private restroom. Do not view this blog while driving a motor vehicle or while piloting an aircraft. Viewing this blog may be illegal inside the EU, NYC, Chicago, Seattle, and other parts of the Third World. THIS BLOG CONTAINS (albeit often very childish) ADULT-CONTENT. DISCLAIMER: This blog is a hobby, it is not a livelihood. Even though much of what I blog about relates to firearms collecting and recreational shooting, I am not an expert (by any measure) on any facet of guns, shooting, hunting, or personal defense. Entries at this blog are akin to good old-fashioned campfire chats or post hunt bourbon-fueled barroom-bluster; I offer no opinion on what you should or should not purchase, or what you should be using or doing. What does or does not work for me could be rugged-country-miles away from your tastes and your needs. All products, places, and miscellany that I review for this blog are purchased / rented / leased at retail price by me. I do not accept payment, gifts, discounts, freebies, products on loan, distilled spirits, recreational pharmaceuticals, plea-bargains, probation, parole, Papal Blessings, Presidential Pardons, or sexual favors for doing any review or blog post. TRACKING COOKIES: Google et al stick tracking cookies on everybody. If you are online, you are being spied on via one method or another, for one reason or another; 'nuff said. You may be able to minimize your online DNA residue by using Tor and Duck Duck Go. Vive la liberté! Vive all y'all! Ante omnia armari. To each of you, thanks for stopping by!

Wednesday, October 7, 2009

Hard Times Investing Update 10/07/2009


It has been a while since I did the last
Hard Times Investing Update; it was February 4, 2009 to be exact. On that date, as a patent joke, I predicted a bear market bottom of 675 as a closing low for the S&P-500 simply because all of the experts seemed to agree that we had already hit bottom. It turned out that the experts were wrong and down the markets went. On March 9, 2009, the S&P closed at 676 and has chugged and churned upwards since. My contrarian guess for a market low was nothing but dumb luck; I bring it up only to point out that professional stock market pundits are no better at guessing than we commoners are.

As a hedge, recently I took some profits from a few of the purchases that I made when the markets were ratcheting down into the bowels of Hades; my modest portfolio asset allocation is back to around 46% cash and 54% equities. At its worst point during this market crash, my portfolio value had dropped 25% from its high. Since then I haven’t done too poorly, the portfolio is now within only 3% of being back to its all time high whereas the S&P-500 needs to tack on around a 48% gain from its current level of 1057 to return to its pre-crash high of 1565.

Why was it that I didn’t bet the ranch and go to 100% equities when the S&P closed at 676? For the same reason that I was not 100% cash before the markets tanked; because I have been at this long enough to know that I am only guessing which direction markets are heading, the markets have humbled me many times over many years. My goals for the retirement portfolio are simply to preserve capital while striving for a realistic growth rate. If I don’t try to get rich I will (hopefully) avoid becoming poor. While I have not done badly in preserving capital, obviously I have not beaten the market; I have not yet achieved the growth that I had mapped out. There is still work for me to do and risks that I must take; I am hoping that my dumb luck holds. I expect there to be a substantial market drop soon but I don’t expect to see a return to 676 for the S&P-500 for the near future, barring an act of war or other calamity. So long as there is enough credit available for the major market players to avoid margin calls and the resulting forced liquidations, my wild-ass-guess is that we still have some market upside momentum. Right now, the pundits seem to be evenly split into three camps; “we are in a new multi-year bull market,” “we will ratchet sideways for years,” and “we will return to the pits of hell.” Once the majority of the experts agree on the markets direction, it will probably be best for me to go the other way.

DISCLAIMER: Nothing in this entry is financial advice.



2 comments:

  1. "My goals for the retirement portfolio are simply to preserve capital while striving for a realistic growth rate.

    So what is a realistic growth rate?

    ReplyDelete
  2. “So what is a realistic growth rate?”

    Heh, that is the prize-winning question and I can only answer from the center of my own little universe.

    For now, at my age, with my limited abilities and resources in an economic world gone mad, I believe that 5% annualized *over the rate of inflation* is still realistic and that is what I am shooting for. As I get older, I may need to back down even further on my risk tolerance and just try to stay even with inflation.

    ReplyDelete

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