What We've Been Up To This Past Month
Well, it's been a month since the "Trump rally" fired up from the depths of an 800+ point drop in the Dow on election night. With a few short dips to catch its breath, the stock market hasn't looked back. Record after record for the Dow, the S&P, even the NYSE scream that, "All is well" in the America soon to be led by Mr. Trump. With deregulation allowing business to flourish again, monetary reform holding the Fed's more problematic policies in check, the surgical removal of (only) the diseased parts of Obamacare allowing Americans access to reasonable health care, no matter the state of the health, and all the other assumptions that must be behind a stock market floating above all rational measures of valuation, the future looks bright indeed.
Having taken a step back to observe the fun times over the last month or so, the following thoughts bubbled up from my stock of financial memory starting with: The market can stay irrational longer than you can remain solvent. While my own "anti-stock" portfolio takes a bullet or two during this hot stock streak, I'm just grateful that we never bet the ranch agin' the stock market, and that our heavy allocation to cash have allowed us to hang in there. At some point the worm will turn and we want to be positioned to pick up some chips when it does.
But enough of "us." What about you? Well, perhaps you're in the enviable position of owning stocks in significant enough quantities to make money. If so, enjoy the run while it lasts. Just make sure you've got an exit strategy in place before you lose all those gains when a correction inevitably arrives. On the other hand, if you're taking it on the chin - at least a bit on the chin - you may be looking for a "better way" to allocate your assets, one that doesn't rely only on investing in that which is "undervalued," or selling that which is clearly "overvalued." Not that value isn't relevant; it's just not all it's cracked up to be.
So today's thought is: Let's look at ideas that will allow for a level of diversification that reduces the volatility of our portfolios, even as it leaves us a little leeway to pursue particularly attractive opportunities (basically bets), or hedge against perceived threats without requiring us to commit too much capital. OK, so that's maybe not perfectly clear. But that's because exploring ideas by it's very nature implies we're going out into the "unknown," or, at least, less well known.
Yeah, that's what we'll be doing in coming weeks, with the option to buzz out from time to time during the holidays, maybe even share a draft or two of cheer with you all.
Meanwhile, with chins up and mental gears twirling we head off into that mess of research and analysis that have occupied us over the last months, especially recent weeks. One way or the other, we should wind up in a better place, even if our current locale isn't all that bad.
So with a nod to holiday season, we tip our hats to all of you preparing for Christmas and Hanukkah. Join the club!
Having taken a step back to observe the fun times over the last month or so, the following thoughts bubbled up from my stock of financial memory starting with: The market can stay irrational longer than you can remain solvent. While my own "anti-stock" portfolio takes a bullet or two during this hot stock streak, I'm just grateful that we never bet the ranch agin' the stock market, and that our heavy allocation to cash have allowed us to hang in there. At some point the worm will turn and we want to be positioned to pick up some chips when it does.
But enough of "us." What about you? Well, perhaps you're in the enviable position of owning stocks in significant enough quantities to make money. If so, enjoy the run while it lasts. Just make sure you've got an exit strategy in place before you lose all those gains when a correction inevitably arrives. On the other hand, if you're taking it on the chin - at least a bit on the chin - you may be looking for a "better way" to allocate your assets, one that doesn't rely only on investing in that which is "undervalued," or selling that which is clearly "overvalued." Not that value isn't relevant; it's just not all it's cracked up to be.
So today's thought is: Let's look at ideas that will allow for a level of diversification that reduces the volatility of our portfolios, even as it leaves us a little leeway to pursue particularly attractive opportunities (basically bets), or hedge against perceived threats without requiring us to commit too much capital. OK, so that's maybe not perfectly clear. But that's because exploring ideas by it's very nature implies we're going out into the "unknown," or, at least, less well known.
Yeah, that's what we'll be doing in coming weeks, with the option to buzz out from time to time during the holidays, maybe even share a draft or two of cheer with you all.
Meanwhile, with chins up and mental gears twirling we head off into that mess of research and analysis that have occupied us over the last months, especially recent weeks. One way or the other, we should wind up in a better place, even if our current locale isn't all that bad.
So with a nod to holiday season, we tip our hats to all of you preparing for Christmas and Hanukkah. Join the club!
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