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I'm nervous
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"This is too good to be true" is what I said this noon when I got back from a business meeting and saw another big gain day for my portfolios, real and pretend. I remember saying "This is too good to be true" a lot back in the days when Alan Greenspan was talking about irrational exuberance. I had the basics of my system in place back then, but I changed percentages instead of selling. The consequences of that bad decision are in front of me every time I look at my records. Now I always sell when a category exceeds 10% whether I want to or not; even when greed and my conscience wrestle. Today I had a different problem. 30% of my SLO assets were in cash already. I really couldn't sell very much much without going out of compliance. But the trajectory of my portfolio was (and continues to be) "too good to be true." I ran the numbers through my analysis program and found no asset category over 5% (except cash of course), no cap size out of whack except mid cap (and IWP still refuses to sell through the Marketocracy system), no sector over-represented. What to do??? I decided to cancel the limit order I had set for gold and fill out the missing $17,174 of my allocation for commodities. I bought IAU at $2 a share more than I had hoped to pay for it, but if the market crashes down, it's reasonable to assume that gold will go up rather than down, so it should be better than cash. If something drastic happens before Saturday, my remaining limit orders should trigger. If not, my portfolio should continue to profit because nothing looks "wrong" about any individual stock I own and the proportions of asset classes are okay. Like toroandbruin, I'm hoping for a soft landing, but just in case, I think I've made the most sensible move the rules of the competition allow. | ||
Comments (1)
If you want to park more cash than the M-cracy rules allow, you could consider a short term bond ETF. I think ticker BIL is the shortest term, investing primarily in treasuries with less than a year's duration. Should be a pretty good proxy for cash.
Wouldn't be good as a short term parking lot because of the commissions, but it should work out if you wanted to park cash for the remainder of the contest.
Posted by Russ | September 28, 2007 8:38 AM