How I'm Positioned for the Stock Market This Week

This week I expect the market to move sharply, one direction or the other.   There are significant forces pulling the market in both directions.  On the bearish side, the downward pulling force is that corporate earnings are very poor and are likely to continue to be poor again this week.   Even companies that have previously defied poor earnings expectations, e.g. Google, are succumbing.  On the bullish side, the upward force is the collective central bank actions to support the economy and the stock market.    There is a very small chance that earnings will provide a positive surprise.  In addition, some traders believe Bernanke will do everything to keep the market up until after the election.

I've positioned our portfolio to benefit from a move in either direction.  Last Friday, I invested about 10% of my investable retirement account in a conservative managed account that focuses on dividend paying stocks.  Fortunately, the purchase in the account were made late in the day, limiting my losses to 0.25% versus 1.66% for the S&P.  So if the market advances, this account will benefit.  Most of  the remaining 90% of my investable retirement accounts are in cash (80%), CDs (10%) and a small amount of stock (0.25%).  So if the market declines, I will have an opportunity to increase my investments at a lower price.

For a market decline, I plan to make small purchases from my stock watch list or .  However, I plan to wait for at least a 10% decline before making another managed account investment.

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

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

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