Follow Kerry Balenthiran ( @17_6YrStockCyc ) on Twitter. Kerry Balenthiran studied mathematics at the University of Warwick and then worked as a Spacecraft Operations Engineer in the UK and at the European Space Agency. He qualified as a chartered accountant with Arthur Andersen and now works as a consultant within financial services. His mathematical background led to a fascination with the cyclical nature of stock market booms and busts. Kerry Balenthiran's first book "The 17.6 Year Stock Market Cycle, Connecting the Panics of 1929, 1987, 2000 and 2007" is out on 25th February 2013.
Enjoy discussing anything Stock Market related.
Have a daily interest in Stock Market Cycles, Technical analysis and Market timing.
JustSignals, my blog, uses a combination of Cycle Analysis along with Trend Following techniques to maximize gains and minimize losses... "Confidence is contagious. So is lack of confidence" -Vince Lombardi
Full-time Investor, and frequent speculator.
Focus on US Stocks and Real Estate.
Degree in Economics and Finance.
About 40 years of economic analysis and active investing experience. Retired Financial Services CEO (company had $2 Billion in financial assets).
I invest solely for my own account, and offer no services for hire. My investments are my only source of income.
Macroeconomic conditions and cycle progression are the foundation of my investment strategy. I evaluate the macro trend, and then select investments that will benefit from that trend, shifting the mix as the cycle progresses.
Earnings growth is the sustainable fuel for investment gains. So, I look to position my portfolio accordingly, seeking those companies and industries whose profit outlook is better than average. This condition shifts as the cycle progresses.
I stay fully invested during the rising tide of a growing economy. I use leverage until the expansion shows signs of constraints and exhaustion. Rising input costs (wages, materials, energy, interest rates) eventually squeeze corporate profits, making growth less feasible, and recession probable.
When I see evidence of a coming recession combined with weakness in the market, I exit my equity positions, reduce my real estate holdings, and shift to the safety of cash and treasury bonds.
After the market slides deeply, and after the panic reaches headline proportions, I begin to reinvest as I anticipate or see evidence of the market bottom. I successfully avoided the majority of the 2001-2002 and the 2008 bear markets, while being fully invested for the bull markets around those declines.
In prior cycles I purchased individual stocks. However, during this bull market I am making heavy use of ETFs (including Sector ETFs). This is much less work, but results in more average returns. I do purchase some individual company stocks when I think the company will perform better than the average in its industry sector. I do not sell short, and rarely use options.
My portfolio is about half market tracking. I also use sector rotation, selected specific companies, modest margin debt, and 3x leveraged ETFs, within the rising cycle trend to magnify and outperform the average trend. I also adjust the size of my market exposure based on market conditions, and historic patterns.
My gross investment asset allocation target is roughly 70% stock, and 30% real estate (rentals).
Current Stock Portfolio Mix (May 2018): 36% Broad US Market Tracking (SPY, RSP, QQQ...), 8% International, 7% Berkshire Hathaway, 7% Financial Services, 11% Consumer Discretionary (VCR), 11% Homebuilders and related, 7% Industrials (XLI), 4% Materials, 10% Energy. Total Stock Market Leverage is 1.04x (down from 1.34x in 2014). No bonds, and cash is about 2% of gross assets. Real Estate is Residential Rentals, mostly near the beach (average LTV is about 35%).
Over the past few decades of active investing in stocks and real estate, my investment returns have exceeded the average return of the S&P 500. Since the prior market peak in October 2007, my Stock portfolio average total return on equity has been about 14% per year, compounded. My Real Estate portfolio average total return has been about 8% per year for the same period. The S&P 500 average total return has been about 8% per year during the same period.
Novice trader. Invested in mutual funds (about 50/50% stock/bond mix and some dry powder). SA has been a great resource for me, because of the contributors but even more so because of some very helpful commenters.
I'm pretty risk adverse in my fund choices. I realize the bottom could fall out of the markets - I've been too concerned about a stock market major correction or crash from 2012 onward. That's because I was fighting the fed and worried too much about inflation (due to money printing) which didn't happen. I've changed my ways since starting to read on SA and other sites. and I'm not listening to the news and doomsday types to make my investing decisions. I'm working on charting my own financial future carefully on ups and downs.
I'm interested in PM for insurance and for making some money on the volatility.