LIONX is about 95% invested. We own about 75% in two short-term bond ETFs and about 20% in various stocks with about 5% in Cash. I sold several stocks as they hit sell points and invested the proceeds to our short-term bond ETF position. The bond ETFs we own have been trending up since the market topped in October. The stocks we currently own are showing resilience and support while the indexes fall below their 200-day moving averages (dma).
The Bull Market turns 10! It has been 10-years since the market bottomed on March 3, 2009 and the long-term trend is still up even with the steep 19% Q4 decline we just witnessed. During the last ten years, the Fed kept rates artificially low (near 1%) on the monetary side and that helped to produce stock market gains. Cheap money allowed companies to borrow at low rates and do stock buy-backs which decreased the float and boosted earning causing stock prices to rise even higher. Trump reduced taxes and regulation on the physical side and that helped to boost stock prices even more. I believe that there will be a price to pay for this global sea of easy money, but we do not appear to be there yet. However, I am watching for signs of a top like we had in October 2018 and will do my best to get out of harms way. I am a risk manager and I never buy and hold anything because yesterday’s gains are gone, and tomorrow is all that counts. I plan to ride the wave until it breaks.
A weak jobs number and plunging Chinese exports sent the Indexes further below their 200-dma last Friday. However, the gap-down open ended closing near the open which is very constructive and shows signs of exhaustive selling. The average growth-stock leader has been backing and filling since last Monday and that is also constructive action. My watch list of stocks to buy has been building but I am waiting for more conviction to confirm if the recent index decline has run its course. I am constructive on the market, but my discipline has me owning less growth stocks than I held two weeks ago. If the market turns higher from here on strong volume, I plan to get more invested in stocks and less in bonds. However, if the market heads lower, I plan to follow the dictates of my discipline.
Bottom line: The market was due for a pull-back and the 2% drop may have been what was needed to correct the run-up off the Christmas Eve Low. I stand ready buy new positions if the bull advances or sell existing ones if the bear comes out of hiding.
(Portfolio holdings are subject to change at any time and should not be considered investment advice. There is no guarantee that any investment will achieve its objectives, generate positive returns or avoid losses.)
Studies show that people who eat the most fish have a lower risk of all sorts of diseases, including heart disease, dementia and depression.
Everything you’ve ever wanted is on the other side of fear.
Verse of the Day:
Do not be anxious about anything, but in everything, by prayer and petition, with thanksgiving, present your requests to God. Philippians 4:6
The chart below shows the net return for the last 12-months of LIONX (red) verses S&P 500 (green). Note the Return and the Volatility (risk). I believe that managing risk is the key to long-term success. Past performance is no guarantee of future results.