Dividend Growth Investing, Retirement Income, Stock Market Investing, Stock Market Timing, Uncategorized

Could It Be Over Already?

It’s indeed a strange one! Last week started so ugly, and I noted that a bottom looked to be forming with Monday and Tuesday, and said it was likely a good place to become a buyer. Each day last week, the market sought to test that bottom area after it had reversed, and found buyers every time. Friday became impressive, and I noted how orderly the week turned out to be, and that it was starting to show genuine health… yesterday’s follow-through truly added to that perception in a big way.

But, now… we’re not far from, and we are getting close to, that place where the real weight of overhead resistance should start to appear. There are a lot of fearful holders who are looking at their chance to lighten up, or get out entirely. This will result in some choppiness, and it’s likely to take some time to clear up. The pre-openers this morning are off about 1/4 of 1%. Also, the season of favorability, when monthly 401k plan monies has been invested is ending. This could also result in…

Further fearful downside price action, of the kind I keep saying that I will wait for, so that our cash might build, and I might hopefully get better prices. It seems rather highly unlikely that a decline, of the nature of that which started in the summer, and resulted in a crash in the latter part of August, could actually be all over already… highly unlikely.

Now, this is what really needed to be reported… while the major indexes are still between some 6 and 9% below their highs… because we deployed cash around the lows of August, and sent some more to our accounts at that time, the resultant recovery of late, has actually pushed our total portfolio balance to a new all-time high in value. That’s not to say that we are about the process of trying to build a nest-egg, but, rather, it is to illustrate how that any amount of relatively good market-timing, for the purpose of accumulating more shares of safe-dividend growers, while ignoring what a sell-off is doing to one’s portfolio balance, results in a much quicker recovery of a loss, as the newly acquired shares do some appreciating almost immediately, and some cash is added to begin the re-building of one’s cash balance to further deployment during the next low-risk market entry opportunity.

Since it actually matters as to just how much cash we added, I can tell you the new amount we sent in did not even represent as much as 3% of what our total portfolio balance was. It stands to reason, therefore, that the market having recovered at least 1/2 of what had been lost, and we having added nearly 3% more in cash, that our total balance would have attained unto a new all-time high, at a place where the market is still a good ways away from doing so itself.

Here’s to your successful investing!
Harold F Crowell

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2 thoughts on “Could It Be Over Already?

  1. My only defensive move is to not be a buyer after I’ve detected a low-risk entry and bought in. I’ll be ‘defensive’ until my indicators seem to be telling me that risk is low again. I still think we’ll see that yet before this year is out.

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