I am not a financial advisor but an individual investor trying to navigate my way through a difficult market. I have never worked for a financial institution and never will. In these posts, I am acting as an unpaid financial journalist and an occasional political commentator. I am also aggregating financial news stories that I view as important and providing readers of these posts with links to those articles, sort of a filtered, somewhat intelligent, free search engine. Any discussion made by me of particular securities is not a recommendation to buy or to sell. Trade at your own risk. Consult with your financial advisor prior to making any purchase or sale. I will try to identify my sales too but it may take a few minutes after I implement them to create a post explaining my reasons. The sale may before or after the post. Before buying or selling any stock, even one recommended by a trusted financial advisor, please research it and make up your own mind which is what I always try to do. Research would include reading reports, reviewing financial records, earnings estimates, sec filings and prior earnings releases and news. In this post, and all others by me, I am merely describing my reasons for purchasing or selling securities, and the potential pitfalls that I identified prior to purchase or the reasons for a sale. The securities mentioned in this and all posts written by me may not be suitable for others based on their unique financial position and risk profile. By way of example, it is unlikely that I will ever need the funds contained in my retirement accounts. Always read the prospectus before buying a Trust Certificate, bond, preferred stock or other bond or bond like investments. Information contained in my posts has been obtained from sources believed to be reliable but cannot be guaranteed. It is always important to follow the investment process. the investment process/links to further information on canadian energy or royalty trustsInvestment Process Part II: Bonds and Bond Like Investments NOT A RESEARCH SERVICE/Add of PWE Last Week These posts by me do not constitute investment advice, nor shall they be construed as a guarantee of future results, or as an offer of any transaction in securities. All content in these posts is provided for informational and entertainment purposes only, and it is a form of entertainment for me. Opinions are subject to change and they certainly evolve over time as information is assessed and analyzed for compatibility with prior opinions, the only process for a serious investor, and a topic of frequent discussion in this post. Everyone is responsible for their own investment decisions, and no one should ever make any decision unless they are willing to accept full personal responsibility for it.
Monday, June 29, 2009
Sold GIVN/Grading Management of Retirement Accounts Since October 2007 at an A
1. Sold Given Imaging: I was looking through my portfolio this afternoon for something to sell after buying 100 IGE, as required by my trading rules, and did not want to sell anything. Finally I sold the lottery ticket Given Imaging at $10.2 bought at $8.08./Buys: GRT & GIVN I will have to raise a thousand today after adjusting for cash flow receipts today and tomorrow or I will have to give myself another demerit for a trading rule violation.
IGE closed with a NAV of $27.9 today, about where I expected it to end the day.iShares S&P North American Natural Resources Sector Index Fund (IGE): Overview My purchase intraday was at $27.85.
In fact, I earned a boatload of demerits today. Among the most important had to do with buying the wrong can of diced tomatoes for my mother who has macula. So I take her grocery shopping once a week, she deals with the butcher, while I motor about the store picking up everything else for her. She is 86, still a good cook, and fixes a gulash with the diced tomatoes. Unfortunately, the can that I bought had chile pepper seasoning or something equally bad, or worse, in it. I am not clear on that point. Who would have thought that I had to actually examine the fine print on the can after seeing diced tomatoes splashed all over the front. Everything had to be thrown away. That was like 100 demerits.
2. The Volatility Index for the DJIA Closed Today at 22.69: The VXD is inching closer to the 20 demarcation line. While I refer to my model as the VIX Asset Allocation Model, the VXD gave the same bear signals in 2007. VANGUARD ASSET ALLOCATION: IS VANGUARD PROUD? MORE ON VXD The DJIA is slightly less volatile than the S & P 500 index and I would expect VXD to fall below 20 before the VIX. Also, a Trigger Event for a VXD based model would have to be a few points lower than for the VIX due to its inherent lower volatility (VXD did shoot over 30 intraday on 8/16/2007, which was a Trigger Event under the Model). Further Discussion of Volatility and Asset AllocationBoth volatility indexes are moving toward stability which is viewed as a positive. Neither have formed what the model labels a Stable VIX Pattern yet.
The one unusual pattern is for the Nasdaq volatility index. It is moving toward stability quicker than I would normally expect, with the VXN closing today at 26.47. I would expect that index to be closer to the Russell 2000 volatility index, RVX, which closed at 31.35.
3. Retirement Accounts: Graded at A for Management During this Mess: In my Roth IRA, I still intend to purchase directly at auction the ten year treasury inflation protected security in early July and to use my entire 2010 Roth IRA contribution to buy mostly the ten year TIP and some in the 20 year. Otherwise, I am satisfied with what I currently own in my retirement accounts with several opportunistic buys of bonds and preferred stocks, along with a few stocks like DuPont near $16. While I could sell all of those securities for a good gain, they are more valuable to me in those accounts just throwing off income, in many cases at 10% to 25% annually based on my cost. The floaters were bought at what I consider favorable long term prices, providing me with good interest income in either a deflation or an inflation scenario. At most, I may sell Abbott Labs in the event the share price moves to 50, but I do not plan to do anything else in those accounts for the remainder of the year other than the TIP purchase next month. These accounts just look really good to me now.
Some of what happened in those retirement accounts was just luck (e.g. the still unexplained spurt in XFL to over $33 near the close of trading one day), some of it was just good management and superior stock and bond selection, but the end result has placed me ahead of the account values in October 2007 by almost 10%, after adjusting (adding) the subsequent contributions to the October 2007 market value. So, under the circumstances, I give myself an A in managing the retirement accounts during this mess, and a B on the much larger taxable account, where I committed virtually all of my mistakes in 2008. I am also extremely pleased with the results of the five or so Roth Conversions that I did starting in October last year.