jmrathbun's  Instablog

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I've been investing for my retirement since the late 70s. I mainly use mutual funds and follow major trends. I doubled my money in the past decade. In the 80s and 90s I tripled in each decade.
  • Boring Boring Boring 0 comments
    Jul 5, 2014 4:38 PM

    And sometimes that's good news!

    The S&P500 with dividends reinvested is up 4.7% this past quarter. Annualized, that's a 20% yield. Do that every year for a decade and you've gained a SIX-FOLD return! I'll settle for that.

    So when is the big correction coming? I can't predict the next few months but I still don't see any sign of trouble on the horizon. All the indicators I follow are encouraging except the one mentioned in my previous article: the FRED equity percent is at 40 which suggests only 5% average annual returns for the next decade. That's below par, but a canny investor hopes to ride the bull while he runs and then jump when he stumbles, passing a chance to furnish lunch for the bear.

    (All percentages include distributions.)

    I only sold one position this quarter, and it was a stinker: FOCPX lost 9.9% over two months. Ugh!

    I added one position to my sector rotation portfolio: XLP, up about 4.6% over the past two months. The other three were held for the quarter and yielded as follows:

    • XLB up 4.9%
    • XLE up 12.9% (thank you, Middle-East Radicals!)
    • XLU up 7.7% (thank you, perma-bears!)

    Overall I can't complain about this method!

    One of my two small stocks, in which I have appropriately small positions, did not shine:

    • AABVF +5.6% (Mid-East moved gold a bit)
    • AXPW -17.4% (They announced a major sale in the renewable energy market but skeptics abound)

    Other funds held for the quarter did as follows:

    • HDPMX +5.8%
    • JSVAX +4.5%
    • PRHSX + 4.4%
    • RPG +5.9%
    • DODGX +4.5%
    • PRWCX + 4.0%
    • SSHFX +5.0%

    Two funds were purchased besides XLP:

    • DODWX up 4.7% in three months
    • VCVLX up 6.0% in two months

    Finally, I bought IWS in early July.

    Now is the time for me to say something profound about the market... what worries me or fills me with hope. What worries me most right now is the Ebola outbreak in West Africa. I sure hope our CDC is on top of this to prevent a spread of contagion to our shores. Stay tuned!

    What fills me with hope is that the US electorate seems progressively dissatisfied with our current economy and will likely respond by returning power in Washington to those whose ideas about taxes and regulation could lead to actual prosperity. That seems to be the way the market is betting, and I don't want to fight the tide with my retirement portfolio.

    Best of luck to you and yours!

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