Cycle Trading

[Duma]

You are asking me a question I can not answer for you, but you will see in a minute how timely your question is. Let me give you a bit of my experience. I have been investing for a long time and have tried about every way there is, all of which but one has been a failure.

I started off just investing in a Vanguard S&P500 mutual fund, but then I fell for a firm that did managed accounts, that is they selected stocks. They said they could kill the S&P. They did not even come close. I axed them.

After a couple of other failed plans, I went with a money manager who sold me on a very conservative plan of investing in different indexes to get a balance and avoid large drawdowns. That was over 10years ago and I am still using him. When compared to the S&P, he has done terrible. 2018 was a bad yr with the S&P down -4.9%. He managed a -13.6%. So much for conservative.

He did better in 2019, but 2020 was a disaster. Market was up 16.7%, he did 6.4%. We have been reluctant to do something different for fear of doing something real stupid. Well we are over that, I have my 4Q meeting with him Thur and he will hear the words, "You're fired".

I will tell you my plan, but first one more story that goes to your thinking. When I retired I had a good friend who went into money management. His plan was to invest in the 4 or 5 best S&P sectors. I don't know for sure, but I suspect that he has done okay. I tried my version of that in 2019, but I ended up not liking it. In my heart I still think is a good idea. So it could be good for you if you feel you know which sectors are the ones to choose before that break out. I do not have that confidence in myself.

So I said only one thing has been successful for me for my long term investing and that has been just buying the S&P and holding. The S&P is one of the best solid money makers out there. I posted the numbers to you last week. S&P 13.4% avg for 10 years, NASDAQ 20.4%. Those are good numbers. Go 100% Q's and you can get 20%+. Avoid small caps and REITs that have anything to do with malls or commercial real estate.

So what is my plan after my Fri meeting. My money is already in a Schwab account, so I will have my advisor removed as an advisor. I will sell all the low to none preforming funds he has me in and put it all in the S&P. I will move maybe about 25% or even higher into the Q's, whenever we have a big reset.

I am a firm believer of not trading much with long term accounts. I have also posted my weekly long term chart that will only trigger with a major pb. At somewhere around -20-30% I think it makes sense to start buying puts or selling. I think Jaws is correct and we will see as much as a 75% drawdown. It will be a killer. Flash pb like Feb 2020 don't bother me much.

So look over all the funds available and pay attention to the 5 and 10 yr average returns. So I can't tell you what is right for you, but maybe this will help with your decision. Good luck.