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Market status and my plan 9-22
After a huge week fueled by Fed’s rate cut, Wall Street may take a pause to consolidate the gains in the next week. But the underline pictures of most stocks will keep improving. More stocks will break into new ground. It’s time to take actions.
After last week cut in the Fed Funds Rate, the futures market is betting on more cuts in the next several months. Currently the odds for a 0.25% cut before the end of the year stands at 148%, and the odds for a 0.50% cut at 74%. If history serves any guidance, the probability for the market to move higher in the next 6 months is looking very good.
I own a very diversified portfolio and manage my stocks like managing a mutual fund. No single stock position is greater than 3% of my portfolio, at least initially. I kept fully invested during the recent correction. Most of the stocks I bought in the last two months have performed very well. I wish I had bought more. The YTD return of my stock portfolio is a little over 20% and the overall return of my investment portfolio is about 15% (my bonds and mutual funds have underperformed). Since my portfolio is no more volatile than the SP500 index, I’m very satisfied with the performance. My long term goal is to beat the index by 3-5% annually. It doesn’t sound much, but won’t be easy to achieve over a long period of time. If I could do that in a 15 to 20 year period, I would be better than 99% of all the mutual fund managers. And people may give me a “Guru” title.
Investor intelligence data shows that the bull/bear ratio is increasing again, which means people turned bearish not too long ago will come back to the market. So in the weeks ahead, market dips will be buying opportunities. I plan to buy more stocks or add to my existing positions. Since we are still in the early stages of a new rally, there are plenty of buying opportunities. I bought 5 stocks on Thursday, none yesterday, but may buy 10 to 20 more in the next week. When new stocks are bought, non-performing or underperforming ones will be sold. I’ll try to limit the number of stocks in portfolio to under 100.
A lot of risks to the economy still remain. But I think we can overcome them. I’m as optimistic about the market as early in the year. The stock market will very likely get its historical average return in this pre-election year. Will you complain about a 15%+ gain in the SP500 index?
Happy investing to all!
After a huge week fueled by Fed’s rate cut, Wall Street may take a pause to consolidate the gains in the next week. But the underline pictures of most stocks will keep improving. More stocks will break into new ground. It’s time to take actions.
After last week cut in the Fed Funds Rate, the futures market is betting on more cuts in the next several months. Currently the odds for a 0.25% cut before the end of the year stands at 148%, and the odds for a 0.50% cut at 74%. If history serves any guidance, the probability for the market to move higher in the next 6 months is looking very good.
I own a very diversified portfolio and manage my stocks like managing a mutual fund. No single stock position is greater than 3% of my portfolio, at least initially. I kept fully invested during the recent correction. Most of the stocks I bought in the last two months have performed very well. I wish I had bought more. The YTD return of my stock portfolio is a little over 20% and the overall return of my investment portfolio is about 15% (my bonds and mutual funds have underperformed). Since my portfolio is no more volatile than the SP500 index, I’m very satisfied with the performance. My long term goal is to beat the index by 3-5% annually. It doesn’t sound much, but won’t be easy to achieve over a long period of time. If I could do that in a 15 to 20 year period, I would be better than 99% of all the mutual fund managers. And people may give me a “Guru” title.
Investor intelligence data shows that the bull/bear ratio is increasing again, which means people turned bearish not too long ago will come back to the market. So in the weeks ahead, market dips will be buying opportunities. I plan to buy more stocks or add to my existing positions. Since we are still in the early stages of a new rally, there are plenty of buying opportunities. I bought 5 stocks on Thursday, none yesterday, but may buy 10 to 20 more in the next week. When new stocks are bought, non-performing or underperforming ones will be sold. I’ll try to limit the number of stocks in portfolio to under 100.
A lot of risks to the economy still remain. But I think we can overcome them. I’m as optimistic about the market as early in the year. The stock market will very likely get its historical average return in this pre-election year. Will you complain about a 15%+ gain in the SP500 index?
Happy investing to all!
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