Old_Skeet's Market Briefing 2022

[oldskeet]

This briefing is for the week ending January 7, 2022.
It is ... "Out with the Old and In with the New" as this briefing report starts a new thread for 2022.

The Index Review
For the week the major equity indices finished down for the first week of the New Year. The Dow Jones Industrial Average was down -0.29%. the S&P 500 Stock Index fell -1.87%, the Nasdaq Composite declined -4.53%, while the Russell 2000 Small Cap Index dropped -2.92%. The three best performing major equity sectors for the week were XLE (Energy) +10.55%, XLF (Financials) +5.43% and XLI (Industrials) +0.65%. The widely followed S&P 500 Index ETF SPY closed the week with a dividend yield of 1.20% and was down for the week -1.83%. It is off its 52 week high by -2.98%. The widely followed US Aggregate Bond ETF (AGG) was listed with a yield of 1.77% and for the week and year to date lost -1.44%. It is off its 52 week high by -4.86%.

Following the Markets

Large / Mid / Small / Micro Cap Compass: They were OEF -1.68% ... MDY -1.70% ... IJR -0.56% ... and IWC -2.48%.

Global Equity Compass: For the week the three best were GSP (Global Commodities) +3.66%, IEV (Europe) +0.18%, and EEM (Emerging Markets) -0.27%.

Income Compass: For the week the three best were $CASH 0.00%, SHV (US Short term US Treasuries) -0.01% and HYD (H Y Municipals) -0.45%.

Currency Compass: For the week the three best were FXB (British Pound) +0.55%, UUP (US Dollar) +0.12% and FXC (Candian Dollar) 0.00%.

Hopefully, by next week my computer system will be back up and a more in depth report will be provided going forward.

Thanks for stopping by and reading.

Old_Skeet

[uncleharley]

oldskeet, The Barchart links work, but the others do not.

[oldskeet]

uncleharley ,

I saw that as I checked the post.

I am on the wife's computer so ... it is, for now, what it is.

With this, I took the reference links out. 

Hopefully, I will be back on my system by next weekend.  At least I hope so.

[oldskeet]

This briefing is for the week ending January 14, 2022.

THE INDEX REVIEW
For the second week of the New Year all the major equity indices finished down. The Dow Jones Industrial Average gave back -0.88%. the S&P 500 Stock Index declined -0.30%, the Nasdaq Composite fell -0.28%, while the Russell 2000 Small Cap Index was down -0.80%. The three best performing major equity sectors for the week were XLE (Energy) +5.17%, XLC ( Communications) +0.29%, and XLK (Technology) -0.10% . The widely followed S&P 500 Index ETF SPY closed the week with a dividend yield of 1.20% and is down for the year -2.16%. It is off its 52 week high by -3.18%. The widely followed US Aggregate Bond ETF (AGG) was listed with a yield of 1.77% and for the week declined -0.28%. For the year AGG has had a negative total returned of -1.67%; and, it is off its 52 week high by -4.67%. Year to date bonds (AGG) have out performed stocks (SPY) by 0.49% and cash has out performed them both.

FOLLOWING THE MARKETS
US Domestic Large / Mid / Small / Micro Cap Compass: For the week they were OEF -0.43% ... MDY -0.36% ... IJR + 0.29% ... and, IWC -1.36%.
Global Equity Compass: For the week the three best were GSP (Global Commodities) +4.50%, EEM (Emerging Markets) +2.50% and EWJ (Japan) +0.84%.
Income Compass: For the week the three best were HYG (Corporate High Yield) +0.26%, $CASH 0.00% and PFF (Preferreds) -0.03%.
Currency Compass: For the week the three best were FXY (Japanese Yen) +1.15%, FXC (Canadian Dollar) +0.74% and FXB (British Pound) +0.62%.
Fear & Greed Compass: The week ending reading was 55 (Neutral). money.cnn.com/data/fear-and-greed/

ON TARGET WITH OLD_SKEET
As I write, Old_Skeet remains at 25% cash (+5% overweight), 38% income (-2% underweight) and about 37% equity (-3% underweight) while I await the next stock market pull back before adding to the equity side of my portfolio. Generally, I will rebalance at plus (or minus) two percent from my neutral weightings of 20/40/40 (cash, bonds, and stocks) while letting cash float. I can overweight (underweight) an area by up to five percent with the exception being cash which (again) is allowed to float. Currently, I am light in my bond fund sleeve on the income side of the portfolio due to it's price compression mostly caused from anticipated rising interest rates by the FOMC to combat inflation. Through my investing years I have learned, that often times, the best near term investment strategy is to "just sit." Yes, I know, this is boring. But, it is what I plan to do at the present time as I am thinking that both bonds and stocks go lower in the near term. With this, I have chosen to stay cash heavy since, thus far this year, it has outperformed both bonds (AGG) and stocks (SPY).

FAVORED LINKS
Stock Proxy / S&P 500 Index ETF (SPY)
Short Volume ... nakedshortreport.com/company/SPY
Breadth Reading ... stockcharts.com/h-sc/ui?s=%24SPXA50R&p=D&b=5&g=0&id=p25768973625
Yield Chart ... stockcharts.com/h-sc/ui?s=%21YLDSPX&p=D&b=5&g=0&id=p75520805591
Price Chart (Elder Ray System) ... stockcharts.com/h-sc/ui?s=SPY&p=D&b=5&g=0&id=p20881173280
T/A Opinion ... www.barchart.com/etfs-funds/quotes/SPY/opinion

Bond Proxy / Aggregate Bond ETF (AGG)
Short Volume ... nakedshortreport.com/company/AGG
Yield Chart ... ycharts.com/companies/AGG/dividend_yield
Price Chart (Elder Ray System) ... stockcharts.com/h-sc/ui?s=AGG&p=D&b=5&g=0&id=p07044822535
T/A Opinion ... www.barchart.com/etfs-funds/quotes/AGG/opinion

Thanks for stopping by and reading. I sincerely wish all ... "Good Investing."

Old_Skeet

[retiredat48]

Thanks oldskeet

R48

[uncleharley]

Thank you for the report. It appears that we are on the same or similar page even though we use a somewhat different approach. I am still finding pockets of volatility in various segments of the markets. The volatility is not enough to move the indexes, but it can be an attention getter if it hits one of your holdings. An example for me this past week was my position in PDI. Because of a couple of days of the USD falling in value, I set stop loss orders on nearly everything I hold. The only one that hit the stop was PDI. Consequently I am out of PDI and hold roughly 20% cash. Does that experiance imply that financial oriented investments are now riskier than commodities???  I dunno but the very long term chart for the CRB index is at a 7 yr high with nothing but blue skies ahead. stockcharts.com/h-sc/ui?s=$CRB&p=M&b=2&g=0&id=p15830666956&a=432948892&listNum=86   Maybe the price of the transition to clean energy is more than expected?

FWIW;   The very long term chart for WTIC is also at a 7 or 8 yr high with 90 dollar oil in sight.     stockcharts.com/h-sc/ui?s=%24WTIC&p=M&b=3&g=0&id=p54147994856&listNum=86&a=1097886818

[oldskeet]

This briefing is for the week ending January 21, 2022. Updates have been made through 7:00 pm EST.

THE INDEX REVIEW
For the first, second and now the third week of the New Year all the major equity indices have finished down. This week the Dow Jones Industrial Average gave back -4.58%. the S&P 500 Stock Index declined -5.68%, the Nasdaq Composite fell -7.55%, while the Russell 2000 Small Cap Index was down -8.07%. The three best performing major equity sectors for the week were XLU (Utilities) -0.81%, XLP (Consumer Staples) -1.39% and XLRE (Real Estate) -2.90%. The widely followed S&P 500 Index ETF SPY closed the week with a dividend yield of 1.20% and is down for the year -7.79%. It is off its 52 week high by -8.75%. The widely followed US Aggregate Bond ETF (AGG) was listed with a yield of 1.77% and for the week gained +0.05%. For the year AGG has had a negative total returned of -1.62%; and, it is off its 52 week high by -4.52%. Year to date of the three (cash, bonds, stocks) cash has been the better performer.

FOLLOWING THE MARKETS
US Domestic Large / Mid / Small / Micro Cap Compass: For the week they were OEF -5.95% ... MDY -6.79% ... IJR -7.66% ... and, IWC -8.14%.
Global Equity Compass: For the week the three best were GSP (Global Commodities) +1.74%, EEM (Emerging Markets) -2.22% and EPP (Asia ex Japan) -2.63%.
Income Compass: For the week the three best were TLT (Long Dated US Tresuries) +1.08%, IEF (7 to 10 Year US Tresuries) +0.28% and AGG (Aggregate US Bonds) +0.05%.
Currency Compass: For the week the three best were UUP (US Dollar) +0.71%, FXY (Japanese Yen) +0.45%, FXF (Swiss Franc) +0.10%.
Fear & Greed Compass: The week ending reading was 41 (Fear) @6:30 pm 01/21/22. money.cnn.com/data/fear-and-greed/

ON TARGET WITH OLD_SKEET
Remember An Old Saw ... "So Goes January, So Goes the Year!" According to the article it's a trifecta set of events that now make the old saw's forecast.
financialpost.com/pmn/business-pmn/stock-markets-january-trifecta-faces-risks-from-fed-midterms

Experts Forecast Stock and Bond Returns: 2022 Edition
www.morningstar.com/articles/1074631/experts-forecast-stock-and-bond-returns-2022-edition

For me, I am still with my near term strategy of sit and watch with a sizeable cash position while I await the markets to come to me rather than me going to them. Although valuations are looking more attractive I'm thinking based upon my analysis we most likely will go lower and are probally looking at a correcton in the S&P 500 Index as we continue to move through the 1st quarter. With this, I am thinking of restarting my step buy process in my equally weighted S&P 100 fund based upon it's current breadth reading which is now below 40 as I write. For me, a reading below 40 triggers a buy, in my average in step buy process. If we continue to move lower then I'll continue to make step buys. When we bottom, and turn upward, I will continue to make buys during the lower part of the upward swing back up to a breadth reading of below 40. This is what I call Old_Skeet's position cost average step buy process which is how I play downward stock market movement.  Some call this process a swing play. Another way to play the swing is to own mutual funds that automatically increase their equity allocation in stock market declines and then trim them during the upswing. Columbia Thermostat is a fund that I own that automatically does this. For those wanting more information on how it governs click on the link that follows. www.columbiathreadneedleus.com/investment-products/mutual-funds/columbia-thermostat-fund/class-a/details

FAVORED LINKS
Stock Proxy / S&P 500 Index ETF (SPY)
Short Volume ... nakedshortreport.com/company/SPY
Breadth Reading ... stockcharts.com/h-sc/ui?s=%24SPXA50R&p=D&b=5&g=0&id=p25768973625
Yield Chart ... stockcharts.com/h-sc/ui?s=%21YLDSPX&p=D&b=5&g=0&id=p75520805591
Price Chart (Elder Ray System) ... stockcharts.com/h-sc/ui?s=SPY&p=D&b=5&g=0&id=p20881173280
T/A Opinion ... www.barchart.com/etfs-funds/quotes/SPY/opinion

Bond Proxy / Aggregate Bond ETF (AGG)
Short Volume ... nakedshortreport.com/company/AGG
Yield Chart ... ycharts.com/companies/AGG/dividend_yield
Price Chart (Elder Ray System) ... stockcharts.com/h-sc/ui?s=AGG&p=D&b=5&g=0&id=p07044822535
T/A Opinion ... www.barchart.com/etfs-funds/quotes/AGG/opinion

Thanks for stopping by and reading. I wish all ... "Good Investing."

Old_Skeet

[uncleharley]

The following is an attempt to supplement Skeets weekly briefing with a longer term look at the S&P 500 and project from a technical point of view where the broader domestic stock market is going. I am using a weekly chart rather than a daily to illustrate the projections. For the support bands I used a daily chart as well as the weekly to better isolate where those levels are. So lets look at the weekly chart. stockcharts.com/h-sc/ui?s=$SPX&p=W&b=3&g=0&id=p21428376643&a=524485138&listNum=86

The first rule of chart analysis is that what goes up also goes down. The weekly chart for the S&P 500 clearly shows that the stock market has been going up for the past 2 yrs. This alone indicates that we are due for a bear market. The chart also indicates that the trading volume peaked a few weeks after the price bottomed out. Weekly trading volume has been declining for most of the 2 yr bull market, indicating narrowing breadth and declining interest in rising prices. Momentum, as measured by the MACD indicator, has been rolling over since this past may, another indication of waning interest in rising prices. The Accumulation/Distribution tool has been declining since Nov indicating that the down tick transactions outnumber the upticks while the price has gone up. Finally Captain price has been declining for the past 3 weeks on expanding trading volume, especially this past week. In summary, the preponderance of evidence strongly suggests that the new trend in the price of the S&P 500 is down and we are in a bear market.

Of course nothing goes anywhere in a straight line. Support levels can develop anywhere, however by using a combination of volume based price levels of the daily and weekly charts we can determine the levels where support is most likely to develop. To that end a band of support will likely occur at or near fridays closing price, say 4250 to 4400. My expectation is that that support band will not hold and the S&P will decline further to the 3700/3900 level. We shall see what develops there, but a further decline to 2200 is a probability.

[oldskeet]

This briefing is for the week ending January 28, 2022.

THE INDEX REVIEW
For the first three weeks of the New Year all the major equity indices finished down; but, this week, being the fourth, we saw a little upside come back into the indices. For the week the Dow Jones Industrial Average rose +1.34%. the S&P 500 Stock Index climbed +0.77%, the Nasdaq Composite gained +0.01%, while the Russell 2000 Small Cap Index declined -0.98%. The three best performing major equity sectors for the week were XLE (Energy) +5.09%, XLK (Technology) +2.38%, and XLF (fancials) +1.36% . The widely followed S&P 500 Index ETF SPY closed the week with a dividend yield of 1.20% and is down for the year -6.95%. It is off its 52 week high by -7.73%. The widely followed US Aggregate Bond ETF (AGG) was listed with a yield of 1.77% and for the week declined -0.37%. For the year AGG has had a negative total returned of -1.99%; and, it is off its 52 week high by -4.23%. Year to date of the three (cash, bonds, stocks) by in large cash has been the better performer.

FOLLOWING THE MARKETS
US Large / Mid / Small / Micro Cap Compass: For the week they were OEF +1.52% ... MDY -0.53% ... IJR -0.74% ... and, IWC -1.52%.
Global Equity Compass: For the week the three best were GSP (Commodities) +2.90%, VTI (US Stocks) +0.53%, and VT (World Stocks) -0.69%.
Income Compass: For the week the three best were $CASH 0.00%, SHV (Short US Tresuries) -0.04%, and IEF (7 to 10 Yr US Tres) -0.28%.
Currency Compass: For the week the three best were UUP (US Dollar) +1.72%, FXB (British Pound) -1.18% and FXY (Japanese Yen) -1.45%.
Fear & Greed Compass: The week ending reading was 36 (Fear) @5:31 pm 01/21/22. money.cnn.com/data/fear-and-greed/

ON TARGET WITH OLD_SKEET
It is a fact, equities can literally trade at most any price. I feel that it is important to make sure that on sharp and steep stock market pullbacks, I am not the one forced to sell at declining prices. Instead (and keeping within my asset allocation of 20% cash / 40% bonds / 40% stocks) I plan to buy when others are selling due to big money's deleveraging and forced selling taking place by others due to their weak hands and margin calls. My plan is simple, keep extra cash on hand (currently at about 25%) believing that there will be forthcoming equity buying opportunities. I plan to buy when the breadth reading for the S&P 500 Index moves below 40 on its 50 day moving average scale as long as forward earning estimates remain sound. As of this past Friday January 28, the breadth reading for the S&P 500 Index closed at 36 and has been falling since the first part of January from a reading of around 80. No doubt, the third week of January experienced strong selling pressure with some of the Indexes moving into correction territory. I look for selling action to continue as big money deleverages and weaker investors sell.

On recent stock market weakness Old_Skeet became a buyer in his equity ballast fund sleeve to keep his equity allocation within its guardrail range as the stock market pulled back. My neutral equity allocation is set at 40% with its current reading now being 38%, after recent buying. Most likely I will continue to maintain equity within guardrail ranges of plus (or minus) two percent from neutral (40%) or at desired target ranges which could become as high 47% equity should I choose to overweight (at +5%) along with the rebalance margin (of +2%). If stocks (S&P 500 Index) continue to decline and move into bear market territory then I will strongly consider going overweight in my equity allocation. I'm thinking, for some, this could shape up to be one tough year for investing if the "old saw" comes to be: "So Goes January, So Goes the Year!" But, for me, I see long term opportunity ahead.

FAVORED LINKS
Stock Proxy / S&P 500 Index ETF (SPY)
Short Volume ... nakedshortreport.com/company/SPY
Breadth Reading ... stockcharts.com/h-sc/ui?s=%24SPXA50R&p=D&b=5&g=0&id=p25768973625
Yield Chart ... stockcharts.com/h-sc/ui?s=%21YLDSPX&p=D&b=5&g=0&id=p75520805591
Price Chart (Elder Ray System) ... stockcharts.com/h-sc/ui?s=SPY&p=D&b=5&g=0&id=p20881173280
T/A Opinion ... www.barchart.com/etfs-funds/quotes/SPY/opinion

Bond Proxy / Aggregate Bond ETF (AGG)
Short Volume ... nakedshortreport.com/company/AGG
Yield Chart ... ycharts.com/companies/AGG/dividend_yield
Price Chart (Elder Ray System) ... stockcharts.com/h-sc/ui?s=AGG&p=D&b=5&g=0&id=p07044822535
T/A Opinion ... www.barchart.com/etfs-funds/quotes/AGG/opinion

Thanks for stopping by and reading. I wish all ... "Good Investing."

Old_Skeet

[uncleharley]

I may become dependent on your reports. You deliver most of what I need to get my curiosity going and look a little farther. For instance your note about currencies and the fact that the USD is showing some strength rather than languishing like an unwanted orphan. My look at the daily chart which tracks the value of the USD, as measured against a basket of currencies, indicates that the dollar has broken above a consolidation pattern and is trending up. stockcharts.com/h-sc/ui?s=$USD&p=D&b=3&g=0&id=p81036478851&a=412560997&listNum=86
This means that a dollar can buy more products that are priced globally or get them for a lesser price. Most of those products are commodities such as the metals, oil, gas, & other stuff. If the USD should continue on this new trend, it is unlikely that the price of oil will go beyond $100 per brl. Nat Gas is already at its seasonal peak and could drop to those depression levels of a couple yrs ago and the high price of copper, aluminum, & steel should level out or decline. BTW don't buy any precious metals at this time. The results will make you cry. Back to my point; The headline news for inflation should be better than expected going forward. Inflation will not subside because of the stronger USD, but the headline news should become better than expected. That should help to dampen out further declines in the broader stock market.

[oldskeet]

Hi uncleharley ,

Thank you for making comment and being a contributor to the thread. Your input is appreciated and I hope that you will choose to continue to be a weekly contributor. I try to give enough information to peak reader interest but not so much that readers don't think for themselves.  Seems the thread got your thinking juices flowing as I have hoped it would.

Again, your contribution to the thread is much appreciated.

All are welcome to make comment as well.

Old_Skeet

[retiredat48]

oldskeet,...just be aware I read all your posts...

R48

[Sara]

I sure read them. Don't understand a lot of the charts, but I get the the gist. The information on the dollar is interesting and I will follow this. I get it - traditionally higher dollar = lower oil price. Higher oil price usually indicates higher inflation. HIgher inflation = weaker dollar. Right? So if inflation is higher than the market is expecting, then the dollar should be weaker? Over time of course.

[uncleharley]

You have the gist of it, but you might want to substitute Commodities for oil, just to recognize that there are a number of other factors involved and be sure to remember that the correlations are never perfect. We are talking about the big picture, not day to day or week to week timing.

[oldskeet]

Hi Sara ,

Thank you for making comment. "Don't understand a lot of the charts, but I get the the gist."

For me ...

The naked short link provides short volume information. When over 60% it seems big money is positioning for a decline.

The yield chart also helps me determine when the better times to put money to work as usually prices and yield move in opposite directions. When the yield is high generally it is because prices have fallen.  A better time to buy.

The breadth reading helps me to determine the better times to put new money to work. Generally, when the breadth reading is below 40 I have found the Index will soon begin to turn upwards (being oversold) as long as forward earnings estimates remain strong.

The Elder Ray System is where I draw a lot of my T/A from. If the bar is green the bulls control the action for the day. If the bar is red the bears control the action for the day. And, if it is blue ... price is looking for direction split between the bulls and bears. Then there are the indicators that provided information as well to help determine overbought and oversold conditions.. The MFI (Money Flow) tells me which direction money is flowing. The Commodity Channel provides information on better times to buy and perhaps sell if so desired. The the RSI (Relative Strength) provides information on the strength of price movement along with oversold and overbought conditions.

Pretty simple ... and, not much more to write.

[Sara]

Thank you! The breadth chart confused me - the 36.67 - that is the number of companies ABOVE the 50 day MA? So we are now in oversold conditions per the breadth chart?

[anitya]

Jan 30, 2022 16:54:48 GMT Sara said:

Thank you! The breadth chart confused me - the 36.67 - that is the number of companies ABOVE the 50 day MA? So we are now in oversold conditions per the breadth chart?

What is the weekly and monthly RSI saying?

[oldskeet]

Hi anitya,

Thank you for your question. "What is the weekly and monthly RSI saying?"

For a reading on the RSI of below 30 indicates that the Index would be oversold and undervalued. A reading above 70 would indicate that the Index would be overbought and overvalued. The current week ending reading is 38. For me, this means the Index has moved fron being undervalued during the week into fair value at the close of the week based upon the recent "throwback" rally.

[anitya]

Jan 30, 2022 21:41:37 GMT oldskeet said:

Hi anitya ,

Thank you for your question. "What is the weekly and monthly RSI saying?"

For a reading on the RSI of below 30 indicates that the Index would be oversold and undervalued. A reading above 70 would indicate that the Index would be overbought and overvalued. The current week ending reading is 38. For me, this means the Index has moved fron being undervalued during the week into fair value at the close of the week based upon the recent "throwback" rally.

I did not word my message properly.  Most people when they talk about RSI, they focus on the daily charts and folks were talking about oversold condition as of Thursday.  I was asking to check the RSI for the weekly and monthly charts.  I just checked the weekly chart for SPY and the RSI was 48 as of Friday Close.  

[oldskeet]

Hi anitya , The RSI reading that I provided (of 38) was for the 500 Index's Breadth on a 50 day moving average. I govern buying more by breadth that I do price.  As of Friday market close the Index's RSI reading was 38 based on it's 50 day moving average. During the week it had fallen below 30 where I bought. A throw back rally came moving the RSI up to 38 as of market close on Friday. 

[oldskeet]

This briefing is for the week ending February 4, 2022.

THE WEEKLY INDEX REVIEW
For the first week of February the major equity indices finished up. For the week the Dow Jones Industrial Average gained +1.05%. the S&P 500 Stock Index climbed +1.55%, the Nasdaq Composite rose +2.38%, while the Russell 2000 Small Cap Index was up +1.72%. The three best performing major equity sectors for the week were XLE (Energy) +4.98%, XLF (financials) +3.56%, and XLY (Consumer Discretionary) +3.54% . The widely followed S&P 500 Index ETF SPY closed the week with a dividend yield of 1.27% and is down for the year -5.53%. It is off its 52 week high by -6.33%. The widely followed US Aggregate Bond ETF (AGG) was listed with a yield of 1.81% and for the week declined -0.97%. For the year AGG has had a negative total returned of -2.94%; and, it is off its 52 week high by -5.52%. Year to date of the three cash, bonds, and stocks, by in large, cash has thus far been the better performer.

FOLLOWING THE MARKETS ... FOR THE WEEK
US Large / Mid / Small / Micro Cap Compass: They were OEF +1.50% ... MDY +1.75% ... IJR +0.91% ... and, IWC +2.19%.
Global Equity Compass: The three best were GSP (Commodities) +3.95%, EEM (Emerging Mkts) +2.90%, and EPP (Asia Ex Japan) +2.58%
Income Compass: The three best were CWB (Convertibles) +2.49%, HYD (High Yield Muni) +0.52%, and MUB (Municipals) +0.05%
Currency Compass: The three best were FXE (Euro Dollar) +2.73%, FXA (Australian Dollar) +1.13%, and FXB (British Pound) +0.99%.
Fear & Greed Compass: The Fear & Greed Index opened with a reading of 36 (Fear) and closed with a reading of 35 (Fear).

ARTICLE OF INVESTMENT INTEREST
What to Expect from Markets in the Next Six Weeks, Before the Federal Reserve Revamps Its Easy-Money Stance
www.morningstar.com/news/marketwatch/20220131261/what-to-expect-from-markets-in-the-next-six-weeks-before-the-federal-reserve-revamps-its-easymoney-stance

ON TARGET WITH OLD_SKEET ... I thought I'd comment on my All Weather Asset Allocation, at least once annually, as I feel this will provide readers an understanding and a review of how Old_Skeet governs. Basically, I am an asset allocator that trades around the edges using special investment (spiff) positions. My favored reference links are provided below.

My All Weather Asset Allocation of 20% cash, 40% income and 40% equity affords me everything necessary to meet my needs now being retired and in the distribution phase of investing. The benefit of this asset allocation is that it provides me sufficient income, maximizes diversification, minimizes volatility, and provides for long-term returns. I'm invested in a manner that meets my needs, spins from my risk tolerance, and allows for some flexibility. I do not mark myself against the performance of other investors as their capital mass, their needs, and their risk tolerance is most likely difference from mine.

The 20% held in the cash area provides me ample cash should I need a cash draw over and above what my portfolio generates plus it can provide the capital necessary to fund a special investment position (spiff) should I choose to open one during a stock market pullback. In addition, cash helps stabilize a portfolio during stock market volatility. Example of investments held in this area are cash, money market mutual funds and CD's. The 40% held in the income area provides me ample income generation to meet my income needs. It is a well diversified area that incorporates a good number of income generating type funds. Some examples of investments held in this area are AZNAX, PFANX & PONAX . The 40% held in the equity area provides me some dividend income along with growth of principal that helps (over time) offset the effects of inflation. Some examples of investments held in this area are AMECX, CAIBX & ANWPX.

Generally, for my income distributions, I take no more than a sum equal to what one half of my five year average total return has been. In this way I have found that my principal grows over time. Through December 31, 2021 my five year average total return has been in the 10% range with an average for my income generation being about 4.8% which includes interest, dividends and capital gain mutual fund distributions. Profits coming from my trading activity are not included in the income figure. About 65% of Old_Skeet's money is invested in taxable accounts with the other 35% invested in retirement accounts. I track my results on a monthly, a quarterly, and an annual basis. I generally rebalance at plus (or minus) two percent from my neutral asset allocation weighting while letting cash float. In addition, I can set a target allocation weighting at over (or under) a neutral weighting by up to five percent plus the rebalance margin of two percent. I am sure what I am doing is not for everyone and I don't suggest that it should be. My purpose is to provide readers an understanding of how I govern and the benefit that I have received from my invested capital.

During the past two weeks I have added to my equity ballast fund, VYCAX, along with today opening two equity spiff positions, one in IALAX and the other in FRMCX. In addition, I recently bought on the income side in FTRAX and JGIAX. My asset allocation currently bubbles, after these recent buys, at 24% cash, 38% income and 38% equity.

FAVORED LINKS
Stock Proxy / S&P 500 Index ETF (SPY)
Short Volume ... nakedshortreport.com/company/SPY
Breadth Reading ... stockcharts.com/h-sc/ui?s=%24SPXA50R&p=D&b=5&g=0&id=p25768973625
Yield Chart ... stockcharts.com/h-sc/ui?s=%21YLDSPX&p=D&b=5&g=0&id=p75520805591
Price Chart (Elder Ray System) ... stockcharts.com/h-sc/ui?s=SPY&p=D&b=5&g=0&id=p20881173280
T/A Opinion ... www.barchart.com/etfs-funds/quotes/SPY/opinion

Bond Proxy / Aggregate Bond ETF (AGG)
Short Volume ... nakedshortreport.com/company/AGG
Yield Chart ... ycharts.com/companies/AGG/dividend_yield
Price Chart (Elder Ray System) ... stockcharts.com/h-sc/ui?s=AGG&p=D&b=5&g=0&id=p07044822535
T/A Opinion ... www.barchart.com/etfs-funds/quotes/AGG/opinion

Thanks for stopping by and reading. I wish all ... "Good Investing."

Old_Skeet

[uncleharley]

I am not sure I agree with M*'s view of the next 6 wks for stocks. Since even the supreme court has dissenters that is probably o k. My daily chart of the S&P 500 shows that stocks were doing well until they hit the intersection of the 50 dema and a downward moving trendline. The turn was confirmed by the absence of a meaningful recovery on friday. The part that makes the turn disturbing is that it came while the USD was dropping in value.. Normally a weak USD is supportive of stock prices as well as commodities. Speaking of commodities, the CRB index is on a bull run that looks like it wants to go parabolic. A look at the components of the CRB index shows that oil is strong as well as ag commodities. Metals and their miners had a weak week this week. That divergence from the norm should prove to be worth watching.

stockcharts.com/h-sc/ui?s=$SPX&p=D&b=3&g=0&id=p28921526697&a=412512122&listNum=86

stockcharts.com/h-sc/ui?s=$USD&p=D&b=3&g=0&id=p81036478851&a=412560997&listNum=86

stockcharts.com/h-sc/ui?s=$CRB&p=D&b=3&g=0&id=p24037964828&a=421226752&listNum=86

[Sara]

CRB Index - UncleH - do you have any thoughts on Fidelity's global commodity index - FFGCX?

[uncleharley]

No, I have not looked at it so I have no thoughts on it, except that commodities are priced globally so what is the purpose of another index?

O K, I looked at it. It is nearly perfectly correlated with the CRB index so if you have seen one you have seen them both. 

[Sara]

Sorry - its not an index.  My bad - mutual fund!  Thank you though.

[oldskeet]

Hi Sara ,

The commodity strtaegy fund that I use is Blackrock's BCSAX. It makes up about 4% of my hybrid income fund sleeve and I hold it in this sleeve to help offset the effects of inflation that usually impacts income generating type securities.  Thus far, it has served its purpose.  In the past I have also used Pimco's PCRAX.  I like BCSAX better because it is more broad based.

Here is it's fund report: fundresearch.fidelity.com/mutual-funds/summary/091936682

[Sara]

Old friend - many thanks.  That was on my list as well.  They are similar.  How much of your portfolio is it?  Would you plunge in on Monday if you didn't own it - BCSAX?  Obviously - oil & gas stocks are high right now. Thoughts?

[oldskeet]

Hi Sara , At this time with commodities having the strong run that they have had through the winter months summer might be a better time to start a position cost average entry. I have found through the years of my investing there is some seasonality associated with them. However, when you enter I would do it in a position cost average approach. I may add to my position should commodities go soft during the spring and summer.

[Sara]

I wouldn't have thought of that.  Makes good sense to me.  Thank you and I will start monitoring both funds.  

[fritzo489]

Sara, Not O_S If you're looking at short term hold ,go for it. After looking at 10 year return , not a long term hold at this point . FWIW