April has been very good to me. But, small cap appears to be running out of steam. However, we are in the midst of the "best 7 days" of the monthly stock market cycle. So, even though the R2K is down a bit today, I plan to hold on thru next Friday.
If you need a Mother's Day gift for the angel in your life, don't forget to look at All-About-Angels.com. We have lots of uncommon angels for the people that make your life better. We even have aunt angels that are popular this time of year. Don
Friday, April 27, 2007
Sunday, April 22, 2007
Sy's 2007 warning
I am still 100% in the small cap fund.
But, we have Sy's annual warning.
Sy Harding changed my life.
Here is his most recent post.
I will also copy it here, as posts can disappear.
BEING STREET SMART
by Sy Harding
HOW LONG WILL 'THE FORCE' BE WITH US! April 20, 2007.
It’s that time of year to remind you again of the market’s annual seasonality.
In both bull and bear markets, in almost every year, the market makes most of its gains in a four to seven month period in the fall and winter months.
There is a powerful and consistent force that produces that pattern, and that force is with us in all kinds of markets and surrounding conditions. The positive force is that investors and institutions receive large chunks of extra money every fall and winter. Those chunks come in the form of dividend and capital gains distributions from mutual funds, which begin in November, from year-end contributions by employers into their employee’s 401k plans, IRAs, and profit-sharing plans, and from Christmas bonuses. They come from year-end dividends from corporations, and from private businesses that calculate their profit for the previous year in January and distribute the profit to the owners in February. They come from income-tax refunds.
A lot of that money isn’t even subject to a decision to invest it or not, but automatically goes into the stock market, including automatically re-invested dividend distributions from mutual funds and corporations, and employer contributions to 401K, IRA, and pension plans.
That extra fuel amounts to hundreds of billions of dollars, and pushes stock prices higher regardless of what is going on in the world or in the economy.
However, as April and May roll around that flow of extra money dries up. That not only deprives the market of the extra fuel that was driving it higher, but leaves it much more vulnerable to any disappointing news or profit-taking that comes along. Thus over the long-term by far most of the market’s gains have been made in its favorable seasons, and most of its serious corrections and crashes have taken place in its unfavorable seasons.
That realization is behind the generalized old Wall Street maxim ‘Sell in May and Go Away’. But my research into seasonality years ago found that the market’s seasons do not lend themselves that specifically to fixed calendar dates. Although the market moves with amazing seasonality, the favorable season can last anywhere from four to seven months, sometimes ending in April, sometimes lasting into late June. It seems to depend on how many latecomers the favorable season rally attracts even as the flow of extra chunks of seasonal money dries up.
So in 1998 I combined a short-term technical indicator, a so-called momentum-reversal indicator, with the calendar. I call the result my Seasonal Timing System, or STS.
The way it works is that when April 20 arrives, indicating the market’s favorable season may soon end, the momentum-reversal indicator takes over. If on April 20, it shows the market’s momentum has rolled over to the downside, the exit from the market’s favorable season is triggered. An investor moves to the sidelines to collect interest on cash, or at least to defensive holdings, for the unfavorable season.
However, if the momentum-reversal indicator shows short-term momentum is still positive, then the exit is delayed until the indicator triggers its next sell signal. Thus is the exit in some years delayed to as late as late June.
Back-tested over the previous 50 years in 1998 the strategy more than doubled the performance of the S&P 500 for that 50-year period. That was stunning given that 80% of mutual funds and money-management firms fail to even equal the performance of the S&P over the long-term.
I introduced it in my 1999 book, Riding the Bear – How to Prosper in the Coming Bear Market. Used in real time in my newsletter, and by others since, it has had similar results, even through the devastating 2000-2002 bear market. (In bear markets, any so-called bear-market rallies tend to take place in the market’s favorable seasons each year, while most of the devastating losses still take place in the unfavorable seasons). The entry in 2002 even caught the beginning of the new bull market in October, 2002.
Playing the market’s seasonal patterns owes much of its success to being mechanical. Thus it avoids getting caught up in the usually wrong ‘crowd psychology’ that prevails at market turning points. By that I mean that there is a natural tendency for investors to be fearful after unfavorable season declines have produced market bottoms, usually in the fall, that have them more interested in selling than buying. Conversely, crowd psychology tends to be confident in the spring after the typical rally in the market’s favorable season has cast their fears away, even though the favorable season is usually drawing to a close.
It’s very difficult to outsmart the market’s seasonality. I know that because I also have a non-seasonal market-timing strategy in my newsletter, and like the majority of mutual funds and money-management firms, it beats the performance of the S&P 500 some years, under-performs it other years, and struggles to equal its performance over the long-term, let alone doubling it.
April 20 has arrived. We have certainly not seen the end of upside momentum yet – a new high for the Dow this week. But it is time to keep the market’s seasonality in mind.
Sy Harding is president of Asset Management Research Corp., publisher of The Street Smart Report Online at http://www.streetsmartreport.com/ and author of 1999’s Riding The Bear – How To Prosper In the Coming Bear Market!
But, we have Sy's annual warning.
Sy Harding changed my life.
Here is his most recent post.
I will also copy it here, as posts can disappear.
BEING STREET SMART
by Sy Harding
HOW LONG WILL 'THE FORCE' BE WITH US! April 20, 2007.
It’s that time of year to remind you again of the market’s annual seasonality.
In both bull and bear markets, in almost every year, the market makes most of its gains in a four to seven month period in the fall and winter months.
There is a powerful and consistent force that produces that pattern, and that force is with us in all kinds of markets and surrounding conditions. The positive force is that investors and institutions receive large chunks of extra money every fall and winter. Those chunks come in the form of dividend and capital gains distributions from mutual funds, which begin in November, from year-end contributions by employers into their employee’s 401k plans, IRAs, and profit-sharing plans, and from Christmas bonuses. They come from year-end dividends from corporations, and from private businesses that calculate their profit for the previous year in January and distribute the profit to the owners in February. They come from income-tax refunds.
A lot of that money isn’t even subject to a decision to invest it or not, but automatically goes into the stock market, including automatically re-invested dividend distributions from mutual funds and corporations, and employer contributions to 401K, IRA, and pension plans.
That extra fuel amounts to hundreds of billions of dollars, and pushes stock prices higher regardless of what is going on in the world or in the economy.
However, as April and May roll around that flow of extra money dries up. That not only deprives the market of the extra fuel that was driving it higher, but leaves it much more vulnerable to any disappointing news or profit-taking that comes along. Thus over the long-term by far most of the market’s gains have been made in its favorable seasons, and most of its serious corrections and crashes have taken place in its unfavorable seasons.
That realization is behind the generalized old Wall Street maxim ‘Sell in May and Go Away’. But my research into seasonality years ago found that the market’s seasons do not lend themselves that specifically to fixed calendar dates. Although the market moves with amazing seasonality, the favorable season can last anywhere from four to seven months, sometimes ending in April, sometimes lasting into late June. It seems to depend on how many latecomers the favorable season rally attracts even as the flow of extra chunks of seasonal money dries up.
So in 1998 I combined a short-term technical indicator, a so-called momentum-reversal indicator, with the calendar. I call the result my Seasonal Timing System, or STS.
The way it works is that when April 20 arrives, indicating the market’s favorable season may soon end, the momentum-reversal indicator takes over. If on April 20, it shows the market’s momentum has rolled over to the downside, the exit from the market’s favorable season is triggered. An investor moves to the sidelines to collect interest on cash, or at least to defensive holdings, for the unfavorable season.
However, if the momentum-reversal indicator shows short-term momentum is still positive, then the exit is delayed until the indicator triggers its next sell signal. Thus is the exit in some years delayed to as late as late June.
Back-tested over the previous 50 years in 1998 the strategy more than doubled the performance of the S&P 500 for that 50-year period. That was stunning given that 80% of mutual funds and money-management firms fail to even equal the performance of the S&P over the long-term.
I introduced it in my 1999 book, Riding the Bear – How to Prosper in the Coming Bear Market. Used in real time in my newsletter, and by others since, it has had similar results, even through the devastating 2000-2002 bear market. (In bear markets, any so-called bear-market rallies tend to take place in the market’s favorable seasons each year, while most of the devastating losses still take place in the unfavorable seasons). The entry in 2002 even caught the beginning of the new bull market in October, 2002.
Playing the market’s seasonal patterns owes much of its success to being mechanical. Thus it avoids getting caught up in the usually wrong ‘crowd psychology’ that prevails at market turning points. By that I mean that there is a natural tendency for investors to be fearful after unfavorable season declines have produced market bottoms, usually in the fall, that have them more interested in selling than buying. Conversely, crowd psychology tends to be confident in the spring after the typical rally in the market’s favorable season has cast their fears away, even though the favorable season is usually drawing to a close.
It’s very difficult to outsmart the market’s seasonality. I know that because I also have a non-seasonal market-timing strategy in my newsletter, and like the majority of mutual funds and money-management firms, it beats the performance of the S&P 500 some years, under-performs it other years, and struggles to equal its performance over the long-term, let alone doubling it.
April 20 has arrived. We have certainly not seen the end of upside momentum yet – a new high for the Dow this week. But it is time to keep the market’s seasonality in mind.
Sy Harding is president of Asset Management Research Corp., publisher of The Street Smart Report Online at http://www.streetsmartreport.com/ and author of 1999’s Riding The Bear – How To Prosper In the Coming Bear Market!
Monday, April 16, 2007
Dance of Joy
Things are good for us today. Last Friday, my 401k finally went positive for the year after some disastrous decisions (learning opportunities) in the first quarter. And, on a professional level, we finally had a breakthrough on the manufacture of a Solid Trasar batch. I have struggled with this for years. We will be able to quadruple the batch size and the release characteristics are great!
Here is a great article entitled Bond-market timing is a loser's game. It says in part: “Consider the data, raw and unvarnished: Over the last five years, just 10% of the bond timing newsletters tracked by the HFD have outperformed a simply buy-and-hold strategy. Over the last ten years, the percentage is even lower, at just 6%. These proportions are significantly lower even than the already-quite-low success percentages among stock market timing newsletters.” -- Mark Hulbert 4/11/2007
Mother's day is coming up. If you can't think of a thoughtful gift, please consider looking here.
TTFN, Don
Here is a great article entitled Bond-market timing is a loser's game. It says in part: “Consider the data, raw and unvarnished: Over the last five years, just 10% of the bond timing newsletters tracked by the HFD have outperformed a simply buy-and-hold strategy. Over the last ten years, the percentage is even lower, at just 6%. These proportions are significantly lower even than the already-quite-low success percentages among stock market timing newsletters.” -- Mark Hulbert 4/11/2007
Mother's day is coming up. If you can't think of a thoughtful gift, please consider looking here.
TTFN, Don
Sunday, April 8, 2007
Happy Easter
Happy Easter everyone. We had a nice day with family. After lunch, we went to see a new Demdaco nativity at the shop. It's not on the website yet. But, my sister, the art teacher describes it as whimsical.
It looks like the market is likely to open higher tomorrow. If so, I am likely to be above water for the year. Don
It looks like the market is likely to open higher tomorrow. If so, I am likely to be above water for the year. Don
Friday, April 6, 2007
Good Friday
Happy Good Friday. Today was a Nalco Holiday, as well as for the banks and stock market. So, I worked at the angel shop. Lots of Internet orders today, which always keeps us busy.
BTW, if you are looking for a bereavement piece that we don't have, I recommend The Comfort Company. They are an Illinois-based company that has been around for 10 years. The owner is Renee Woods, who has appeared on Oprah.
BTW, if you are looking for a bereavement piece that we don't have, I recommend The Comfort Company. They are an Illinois-based company that has been around for 10 years. The owner is Renee Woods, who has appeared on Oprah.
Thursday, April 5, 2007
100% small cap
I am going 100% into small cap today. Still down for the year. I am adopting more of a trend-following bias, as the other tools I once used are not working like they once did. You can see our archangel products here.
Monday, April 2, 2007
55% small cap
I have increased my 410k position to 55% small cap.
At the store, one of my favorite pieces is for pilots or any airline professional.
It is the guardian angel of flight pin.
TTFN, Don
At the store, one of my favorite pieces is for pilots or any airline professional.
It is the guardian angel of flight pin.
TTFN, Don
Let's get started
My name is Don. I work at Nalco and my wife manages All-About-Angels.com. Hence, NalcoAngel. My personal interests include our children, grandchildren, investing my retirement funds, and angel-themed giftware businesses.
Lately, my investing has suffered. Not sure why. At the current time, I am only 50% invested in the small cap fund.
The angel shop has a cool new gift item for Mother's Day.
TTFN. Don
Lately, my investing has suffered. Not sure why. At the current time, I am only 50% invested in the small cap fund.
The angel shop has a cool new gift item for Mother's Day.
TTFN. Don
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