GordonGecko
New member
Some background and philosophy to help you figure out whether you will want to track this account. The trading philosophy is to actively monitor what is happening in the market, but IFTs are not frequent, except times (like now) where we are at 'turning points' in the market. It's best to characterize management of this account as 'intermediate.'
With the recent selling, equity exposure is being gradually increased from that of the 100% cash position (in G fund) taken at the end of Oct 2005. As of Friday, G - 65%, C - 25%, I - 5%, S - 5%.
General rationale for this current allocation:
Bonds - Interest rates appear to still be going higher, primarily driven by commodity price inflation and Fed rate hikes. If you look at a 20 year chart of the 30 yr US Treasury bond, the 20 year bull market in long bonds is kaput. There is no reason to have any F fund exposure. If we move into a recession, this position could change.
Stocks (S&P500 - C Fund) - Today the S&P 500 is at a key support level (1230 - 1245 range). There is potential for allocation change (from 25%) in this category over the next 2-3 weeks. I have no clue 'how' this will resolve, but until the market decides, equity risk is considered high.
Stocks (Small cap - S fund) - Small caps have been outperforming large caps since early 2000, but have over the last two months firmly shifted out of favor relative to the S&P 500 for the first time since then. S fund allocation will be no more than 20% of equities for some time to come. Because of the risky equity climate, overall allocation for S is now only 5%.
Stocks (International - I fund) - The I fund has done very well, due in large part to the falling dollar. On a long term basis, however, the dollar appears to be putting in a major bottom. If 20-year support on the USD index holds at the 79-80 level, exposure to internationals should be reduced unless the general equity climate merits more exposure. I fund allocation will be no more than 35% of equities unless the decline in the dollar resumes, and overall allocation for I is currently 5%, given the current climate for equities.
Key index to watch over the next few weeks: S&P 500
Hope you like the new thread.
With the recent selling, equity exposure is being gradually increased from that of the 100% cash position (in G fund) taken at the end of Oct 2005. As of Friday, G - 65%, C - 25%, I - 5%, S - 5%.
General rationale for this current allocation:
Bonds - Interest rates appear to still be going higher, primarily driven by commodity price inflation and Fed rate hikes. If you look at a 20 year chart of the 30 yr US Treasury bond, the 20 year bull market in long bonds is kaput. There is no reason to have any F fund exposure. If we move into a recession, this position could change.
Stocks (S&P500 - C Fund) - Today the S&P 500 is at a key support level (1230 - 1245 range). There is potential for allocation change (from 25%) in this category over the next 2-3 weeks. I have no clue 'how' this will resolve, but until the market decides, equity risk is considered high.
Stocks (Small cap - S fund) - Small caps have been outperforming large caps since early 2000, but have over the last two months firmly shifted out of favor relative to the S&P 500 for the first time since then. S fund allocation will be no more than 20% of equities for some time to come. Because of the risky equity climate, overall allocation for S is now only 5%.
Stocks (International - I fund) - The I fund has done very well, due in large part to the falling dollar. On a long term basis, however, the dollar appears to be putting in a major bottom. If 20-year support on the USD index holds at the 79-80 level, exposure to internationals should be reduced unless the general equity climate merits more exposure. I fund allocation will be no more than 35% of equities unless the decline in the dollar resumes, and overall allocation for I is currently 5%, given the current climate for equities.
Key index to watch over the next few weeks: S&P 500
Hope you like the new thread.
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