It’s getting near years end and coincidentally I’m heavy in cash right now (on the sideline). I’m interested in hearing how some of you invest. I’m talking stuff that’s pretty liquid, not housing and land.
This is how I invest. In the accounts that I have complete control over, I put about half in a stock fund called Hussman Stratigic Growth Fund. Hussman actively manages to avoid losses yet still has the opportunity for solid grouth. He’s the only one I know of who does this. Other funds you’re at the mercy of the market. If the market drops big, your fund value also drops big.
With my company 401k and the rest of the money that’s not in Hussman, I watch the S&P 500 for trading channels. The S&P 500 trades in “channels” that hold up usually for a few years. When it’s at the top of a channel, as it is now, I sell my holdings. When it’s at the bottom I buy back in.
Energy stocks don’t necessarily follow the S&P 500 trend so I trade energy funds the same way, but instead I look at the channels in the IYE and XLE trackers.
I sold my energy funds yesterday and my other stock funds a few weeks ago. With this strategy I probably make 3 to 5 moves a year and don’t spend much time looking at the market until things start getting close to the edge of a channel.
I think for most people the best strategy is to pick some good funds, stocks and bonds via a good broker then just routinely put money in without thinking about it. That way you can put your full focus on your work and kick ass in your career. I’m not smart enough to do that, though. Either that or I’m not trusting enough to hand my money over to a broker and let them handle it.
Has any one else put too much thought into a system? Would you care to share it?