Market Timing - Late October Edition
October 18, 2011
– Comments (4)
Waded back into the large cap value index at market close but with a new philosophy. I will take the major index moves and buy a factor of 10x and sell a factor of 10x. So for example, with Monday's 2% sell off I moved 20% from cash to large cap value. If we sell off another 2% tomorrow I'll move another 20% of cash into large cap value. The key here is I expect choppy action with no clear bias long or short. I want to limit the downside by averaging down incrementally, but sell into strength if it shows up. If indexes move less than 1%, I reserve the right to stay put. I expect a gross return that is much less spectacular than the previous two month's but is more consistent with the thesis that there is no clear direction for the next 2 weeks, but the bias is down. I deem this strategy the hyper rebalance sideways market timing approach.....lol...we shall see.
