Lance Roberts weekly update has some rational advise for EOY and January positioning; it may be different this year as folks try to play the best / worst of tax reform between ’17 and ’18. https://seekingalpha.com/article/4133673-yes-virginia-santa-rally – for me, i am pretty much following Lance with these tactics:
- It is through following these basic rules that, with the markets overbought, underlying fundamentals stretched, we continue to suggest some portfolio actions be taken to reduce, not eliminate, overall risk.
- Tighten up stop-loss levels to current support levels for each position.
- Hedge portfolios against major market declines.
- Take profits in positions that have been big winners
- Sell laggards and losers
- Raise cash and rebalance portfolios to target weightings.
Jeff Miller WTWA focused on implications and reactions to Tax Reform (sic?)
- he changed his weekly chart going to Investing.com‘s weekly S&P Futures Overview
- Jeff referenced this post as a cautionary tale of paying too much attention to the headlines on economic reports … https://seekingalpha.com/article/4133566-personal-spending-new-home-sales-restrain-enthusiasm
- i found an interesting point in the post regarding personal savings … the inference suggested was that due to consumer confidence, savings are low. what if there is contrarian view: savings are low due to the fact that new and current jobs for majority of population, barely pay the bills – hence savings are low?
- Here is another possible data point parallel to my view above. If home builders have a solid view into their markets, the lower priced house starts are not expanding and builders are focused on expensive houses – rich have money to buy, working folks do not have income necessary to buy?
- Personal income is not really growing either – which fits into the storyline of the last two points
- Weekly Indicators
- we finaly got that jump in 10yr notes … i doubled my tax-free account position in intermediate bonds, and will continue to add another chunk if rates increase further next week – this ties back up to Lance’s “January Tactics”
- anticipated inflation also bumped upward above 1.9% … something we have not seen
- For those wanting ‘positive view’ of the power in the growth cycle – there’s still strong legs underneath it
- A 2018 portfolio list? this author holds 25 companies and replaces 5 every year. the two (one sell, one buy) that i watch are MSFT and CHKP. http://www.crossingwallstreet.com/archives/2017/12/cws-market-review-december-22-2017.html
- Another post regarding bonds from author i regularly follow – https://seekingalpha.com/article/4133687-bond-market-risk-2018 – there is some ammunition for either side of the trade, but my take away remains: US rates will bounce around here as inflated expectations of tax reform and fiscal stimulus will push rates higher to follow the magical growth. I see it as another opportunity to increase my fixed income positions and even extending out >20 years – something that i have not yet done this year.
- Here is Brian’s update on S&P earnings horizon http://fundamentalis.com/?p=7453
- This is just interesting … no take away http://www.fourpillarfreedom.com/visualizing-the-net-worth-of-americans-by-age/
- This is another take on similar data https://www.financialsamurai.com/the-average-net-worth-for-the-above-average-married-couple/ – what i find interesting is the bucketing: pre-tax, post-tax and equity (home) … i would add a fourth – cash
- A bunch of maybe / maybe not points wrt 2018 https://fat-pitch.blogspot.com/2017/12/what-to-expect-from-equities-in-2018.html
- This is a month old, but a different perspective on the same rate increase limits that i am following https://www.blackrock.com/investing/literature/whitepaper/bii-global-macro-outlook-november-2017.pdf
- Stocks have more room upward with the internal engine hitting all the cylinders http://thereformedbroker.com/2017/12/24/chart-o-the-day-internals-confirming-strength/
- If you are short on holiday reading and you want to read Hedge Fund letters from Q3 https://vintagevalueinvesting.com/complete-list-q3-2017-hedge-fund-letters-investors/