Ok Mikey what kind of strategic market timing would you do in the current market? How much does it cost you? When would you move the strategic market timing strategy again? Why?
Hyper-B, I am not sure what I would do with your holdings. Since you have thoughtfully assembled them, probably best for me not to make any comments which would of necessity be less informed than the thought you have already put into your work.
I can show you what my current allocation is-as of today's close.
US Fixed Gold Energy Options US Stock Foreign Stock Foreign Bonds REIT ---------- ------- ------- -------- --------- -------------- -------------- ------ 42% 8% 16% 1% 17% 9% 6% 1%
US fixed is I-bonds, 1,2,3 year CDs, and T-bills. It is essntially safe parking, not yield seeking. Foreigh stocks and bonds are developed markets. Singapore is as low as I go unless valuations are great.
If my put program totally craps out, it will have cost me 1.5% in the worst year. I may get permission on my account to write naked, so I can keep costs down with strangles. OTOH, if I were to sell the calls I might as well sell short and I am not quite willing to do that.
I will re-evaluate in fall of 06, looking to close out or adjust bear plays and maybe depending on market levels add more equities.
My main inputs are valuations of S&P (PE10); the particular valuations of stocks I might be interested in buying long; insider buying (aggregate and in particular issues of interest); and the 4 year presidential cycle.
Where I would like to be is heavily in well valued equities in strong well financed companies. That is always my goal. I also like energy. I have had energy investments for years, and they tend to work out given reasonable attention to detail. Recently of course energy stocks have been on fire. Although anything can happen short term, I expect energy will continue to be strong but perhaps volatile for some years to come.
The gold is a contra US stockmarket, contra US dollar play. I am not as committed to it as I am to energy longer term. However, in the right circumstances it can be a medium risk, high reward speculation. Clearly we don't have scarcity working for us with gold, as with some other commodity investments.
I often make judgments that appear to me to be reasonable, but which turn out to be early, wrong, or at least sub-optimal. An example is REITs. I bought REITs heavily in 1999, 2000 and into 2001. Counting dividends, I almost doubled a fairly large commitment. I sold almost all in 2003, feeling that anyone can build a shopping center or office building, and that trouble was just arond the corner. Obviously, I left a lot of money on the table. When you market time and do sector bets, this stuff happens all the time. Still, it can be a pretty stable and high return way to go about investing. Big wipeouts should be rare.
I think a program has to appeal on a deep level or it is hard to withstand adversity. So, my 2 cents
Mikey
