I don't know about you, but balancing the potential of a major bear market popping up at any time, while the market climbs a "wall of worry", is a non-trivial investment world; and that is what we have had to work with for well over 6 months... but... that all changed last week.
Certainly, many quasi buy-and-hold individual investors have successfully ignored the data and assumed the market word go higher this year; and, that strategy has worked like a champ in the first half of 2021. Unfortunately (or, fortunately, depending on your point of view), I do not have the luxury of being able to take on unlimited risk in the management of client accounts.
This era of high-risk in the market began in mid-December of 2020 and it did not end until just this past week. Finally... after more than 6 months of unending bear-biased data that was overhanging this market, the bull-biased data have pulled ahead (in some cases, only slightly ahead, but ahead nevertheless).
And... It is about time!!
But... lest we forget... We are LONG-TERM investors, ONE WEEK AT A TIME even though we are all over this sea-change in the data from mostly bearish to mostly bullish. We are buying and buying big this week. Our plan is to get all 4 portfolio models up to 100% invested sooner than later. We were less than 40% invested at the end of last week, so this is a big move.
Below is today's "Total Market Index"...
As you can see, there are no "TIP Warning" signals (little orange diamonds). A "TIP" is a "Trend Inflection Point", where the algorithm detects a flattening of the TMI (Total Market Index). A TIP, typically occurs when the market begins to transition from bull-to-bear or from bear-to-bull. It is an early warning and not a full-on conviction that a wholesale change in trend in the market.
For the past 6+ months, the market has been (technically) overbought and/or showing strong signs of wanting to roll over; not enough to trigger a TIP, but darn close on multiple occasions.
Finally... though... all of our major market trend indicators moved into the bull-trending column. This is kind of a big deal.
This DOES NOT mean that the market is locked into a bull-trend that has no end in sight. But, it does mean the market has moved into a bull-trend for the time-being. This 'should' mean that the whipsaws will diminish; especially since we are now able to widen our stops significantly.
I know... there are a number of so-called, "big name" pontificators that are saying the end is near. And, just like stopped clocks, they will be right at some point; but they are dead-wrong right now. And, right now is all that matters.
Just like the old saying, "Make hay while the sun shines!", we want to make money for our clients while this market climbs higher. That is the plan and we will stick to this bull-biased strategy until the market changes its tune and decides to move into a bear-biased trend.
While guessing that the market was only going to move higher this year has been a good (great, even) guess, guessing is a terrible investment strategy. Now that the data are screaming buy... buy... buy... that is what we are doing. No guessing... simply relying on the data.
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