Friday, October 13, 2017

Protecting Profits and Raising Cash

At 10 years into retirement, I cannot afford a 50-70% decline in our overall savings.  First, we are entirely dependent on our savings to cover living expenses.  Second, we don't have the luxury of waiting 3-5 years to recover our losses.

We have been enjoying this bull market and the recent advance.   However,  I also feel the downside risk is greater than the upside potential, and the risk continues to grow.    So I've been taking the opportunity to sell some profitable positions and raise some cash.  

For now, I am maintaining our core investment positions, acknowledging that the amount may lose over 50% in the next bear market.   However, since our core position represent about 33% of our investable assets, I believe we can safely handle a major decline in the stock market.   Thus, I can sleep well at night, despite the possibility of a significant bear market.

For more on Reaping the Rewards, check back Fridays for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Wednesday, October 11, 2017

My New Pain Trade Signal

"Markets tend to deliver the maximum amount of punishment to the most investors from time to time." ~ Wall Street Adage

The current greatest pain trade is shorting the market.   The next biggest pain trade is not being invested and being entirely in cash.   Interestingly, investors in these situations don't feel they are in a pain trade.   Most of them still feel they are right, but perhaps a bit early.

These investors are convinced that a market correction is imminent and refuse to consider that the possibility of the bull market continuing.  As long these investors continue to justify their investing strategy, the market will continue to grind up and perhaps even melt up.   It's when these investors finally throw in the towel and admit their pain trade that I will worry about a market top.

For now, I am still bullish, but also cautious.  So I am taking some profits in our trading positions, while maintaining our core holdings, which will continue to benefit from the rising market.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Tuesday, October 03, 2017

Bears Getting Closer to Being Right

Every passing day is a day closer to a bear market.    So every day, the bears are closer to being right. So I'm preparing for the inevitable.   I'm trimming some of our positions, raising cash and creating an investment plan for when the market drops 10%.

The market will fall 10% someday.  And we'll be ready for it.

For more on Ideas You Can , check back Tuesdays for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Sunday, October 01, 2017

Easy Way to Become Rich

According the progressive pundits, Trump's tax reform only benefits the rich.   Since 45.3% of households (77.3 million) pay ZERO federal income tax, only the 54.7% that pay federal income tax will benefit.

So those that pay federal income tax are now part of the rich. Who would have ever thought it was that easy to become rich.

For more on New Beginnings, check back Sundays for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Saturday, September 30, 2017

The Best Reason for Being Bearish

Is it because the market overpriced?  No.  Is it because of geopolitical turmoil, aka North Korea?   No.  Is it because the Fed raising interest rates?  No.  Is it because of issues from natural disasters?  No.   Is it because of  the lack of congressional action?  No. Is it because Donald Trump?  No.

According to Merrill Lynch "the best reason to be bearish is. . .there is no reason to be bearish."  Their point being that the current market advance continues to look great so beware.

However, it seems to me that most people are already bearish: here and here.  I guess all the other reasons, which most investors seem to be worried about,  aren't leading to a bear market, so Merrill had to make the contrarian case.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Friday, September 29, 2017

Getting Paid to Buy

Lately, I've notice that more merchants have been sending free money to spend in their stores.   A couple of years ago, it was only new restaurants that did it to get trial.  Then Chick-Fil-A started send out coupons for free products periodically.  A while ago, Kroger started offering a coupon for a specific free product each week.   Since I go to Kroger or pass by Chick-Fil-A several times a month, it was easy to use the coupons.

At first, most free products were less that $5.  Then last year, I started getting $10 off coupons (for any total purchase on $10 or more) from Staples on a weekly basis, which has since stopped.  Recently, I received in the mail a $10 gift card and $5 gift card from Lowe's and Target respectively, that have no restriction.  Essentially, it was cash that could only be spent in their stores.

Since I live within  2-3 miles of all these stores, it easy for me to go there and make a purchase even if is an additional stop.  Usually, there is something I can use even though I may not need it immediately.

A question is why I am getting these new gift card like coupons.   I don't really know.  In one case, I am a member of the rewards card; in another, I have the store credit card; and on the last one, I have no relationship other than being within 2 miles.

Maybe it's just because I'm retired an have the time to take advantage of these offers

For more on Reaping the Rewards, check back Fridays for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Monday, September 25, 2017

Correction...or Rotation?

Right now, my opinion is this is a rotation.   Technology didn't do well today.  Oil and most of our  biotech stocks did do well.

Fortunately, we own a bunch of beaten down oil and biotech stocks, which offset the declines in our technology stocks.  So our self managed accounts were mostly up despite the decline of the indices.

For now, I plan to continue selling into the rally.   If technology stocks get beat up sufficiently, then I may buy back a small amount in some previous holdings.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Sunday, September 24, 2017

My New 10% Rule

I read an article that stated since 1950, the market has had 35 declines of 10% or more.  In all 35 instances, the market passed the previous highs.  Sometimes within a few weeks, other times a few months, and in a couple cases a few years.  But the recovery happened 100% of the time.  I would include a link to the article, but I can no longer find it.

Of course, the issue is timing.  If it takes 5 or 10 years to recover, it may be challenging for those who have no other source of income.  But if one has time, and other sources of income, it seems to be a no brainer decision to invest something

So from now on, when the market drops 10%, I will put some funds in an index ETF, such as the Vanguard Total Market ETF or the Schwab Broad Market ETF.   Of course, I will use funds that we won't need for at least 3-5 years, such as our children's savings/college accounts..

With all the geopolitical issues, I may get the opportunity to use this new rule sooner versus later.

Disclosure:  No compensation was received for this post.   At the time of the this post, we own shares of the Vanguard Total Market ETF and the Schwab Broad Market ETF.

For more on  New Beginnings, check back Sundays for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Saturday, September 23, 2017

Grinding Up

"The reports of my death are greatly exaggerated." ~ Mark Twain

So is the imminent death of this bull market.

This bull market is like the energizer bunny.   It just keeps going up, despite, or perhaps because of, all the negativity by, well, everybody.   It's a Goldilocks market: not too hot, not too cold, but just right.

It is also a retirees dream market.   Every year, our net worth grows, despite having spent money for our living expenses.

Of course, this can't go on forever.   If this bull market lasts another year, it will be the longest bull market on record.   I would surely enjoy a few more months, or (wishful thinking) a few more years :-)

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

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

Copyright © 2017 Achievement Catalyst, LLC

Wednesday, September 13, 2017

Growing Signs of a Market Top

"No one rings a bell at the market top." ~ old adage

My accounts are showing two of the three signs of a market top.  Many of my beaten down stocks are starting to rise, but nowhere near o 52 week highs.  Oil prices are rising but nowhere near a $100/barrel.

The only sign I don't see are bears capitulating.

So I continue to be cautious but staying invested.

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