“Apple appears to be an outlier. Corporate earnings have been keeping the stock market afloat, but have been a mixed bag this earnings season…
…Last
quarter, corporate earnings saw their slowest earnings growth in nearly two
years. The S&P 500 grew earnings by only
6%. That figure hasn't improved this earnings season, as heading into the week
the current quarter was showing earnings growth of 5.7%, a slight dip from the
previous quarter.” Full story at…
http://www.fool.com/investing/general/2012/01/25/why-the-dows-sinking-today.aspx
Perhaps,
but as long as the economy continues to look good, the S&P 500 should show
reasonable returns since I think investors will be willing to pay more for
stocks. The “P” in the “P/E” ratio
should end higher for the year, even if earnings growth isn’t spectacular. That assumes we avoid Euro-disaster and US
recession.
So far this year the Wilshire 4500 {the
“S”-fund in the federal employee 401-k (TSP)} has outperformed the S&P 500
(“C”-fund) by about 2.5%. We’re not
getting rich in the S-fund, but we could see a higher spread in the future…or
not. As I’ve noted before there are good
arguments either way. For now, I’ll
stick with the S-fund. Since the TSP
only allows 3-moves per month it is best to make this sort of move on the last
day or near the last day of the month. {Editorial note: The Government Employee deferred
stock investment system is probably not covered under Section 401-k of the IRS
code, but since non-government folks are familiar with the term, I’ll keep
using it.}
I cut my trading portfolio today since we are
due for a pullback in the 5% range. That
would be quite normal and of no concern.
I am not making a prediction that will happen; I just decided to take
profits in my 2xNaz position since a 5% pullback would wipe out my profits. I made 9% on the trade; not great considering
the risk, but not bad for 3-months. I am now all cash in
the trading portfolio. (Some of my “trade”
after the October low was in the QQQ, but I decided to treat the QQQ portion as
a longer-term holding rather than as part of the trading portfolio.)
Today
the NTSM remained BUY.
I
bought back into the stock market at S&P 500, 1155 on 7 Oct after the 6 Oct
NTSM buy signal. I remain 100% long in
the long term portfolio (100% stocks in the 401k.). (See the page “How to Use
the NTSM System” – the link is on the right side of this page).
Just
a reminder: 100% invested in stocks is way too much for most rational
folks. Don’t do it unless you have a
high tolerance for risk.
