Stock Market Correction: Maybe Now? July 28, 2007Posted by pf in Expenses and Savings, Portfolio Allocation.
On May 1st, I made some significant changes in my portolio based upon the history of the old adage “sell in May and go away” and updated everyone near the end of May on the progress thus far (post here: Sell Stocks in May and Go Away: Update )…which was not so great.
In June, the market dropped a bit and I posted another update (Stock Market Correction: Now?). Again, this was short-lived and the market proceeded to go on a very steady and purposeful march upward to new highs. During this time, although I missed out on greater returns had I not changed my portfolio, I was still getting some positive results as I remained invested in equities (just less risky ones).
Well, here we are again at the end of July and the market is showing some its potential for nastiness with its worst week in the last 4 years. Interestingly, these last few weeks I had been wondering whether or not I should actually take my tactical strategy even further and reduce the risk to my portfolio even further given the continued strength in the market. Once again, I did not have the courage to match my conviction and my chance has passed (and about $7000 of my portfolio along with it).
Alas, I am not entirely bummed, but more frustrated with this silly game of chance we call the stock market and my apparent ineptitude at playing. Of course, my intent is really not to “play” in the stock market. I’m much more of a buy/hold type investor who likes to keep my allocatoins steady. At the same time, however, I am willing to dally in this whole sell in may bit to see if it can give me some sustainable advantage over the long haul. Perhaps next time around I will have to seriously consider going all the way and getting into cash versus my half-hearted attempt by just reducing some of my exposure.
Anyway, I’m starting to feel a little bit like the kid who says “are we there yet?”. Regardless, my current inclination is to continue hanging on until Fall. Of course, that’s assuming things don’t look like they’ll get significantly worse. In the meantime, I’m going to seriously look at what kind of cash I might be willing to plow back into the market when the time comes (the sell in may approach says November).