Monday, April 06, 2020

Near Term Rally Strategy

Note:  Corrections have been made due to errors in calculations.   The fact checker's bonus will be eliminated this quarter :-)

I expect the market to rally for a short time since COVID-19 deaths appear to be peaking in the U.S.   My plan is to sell our peripheral holdings into the rally, while maintaining our core holdings.

 I have increased shares in existing positions or added shares in new holding during the downturn. I consider most of these newly acquired shares "peripheral" holdings.   I start trading out of these holdings when the return is about 15% nominally.   I experienced 15% gains in as little as a few hours due to the extreme volatility, but more common is a time period of a few days, if I'm lucking.

Overall, we are still down, but as of the end of March, the loss was only -2.3%  -4.2%, since we have a significant amount of cash, and my company stock, which is our largest single holding,  has only declined about 4% 11% since the beginning of the year. 

There will probably be another decline to lower lows.  I will wait for that to happen before adding significant funds to purchase more stocks.

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

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