Few Bargains ~ Great Volatility ~ Quick, Profitable Trading
The Bargain Stock Monitor is one of three market statistics used as performance expectation analyzers for Market Cycle Investment Management Portfolios. It is derived from the Month End Value Stock Watchlist screening program and identifies Investment Grade Value Stocks trading at least 15% below their 52-week high.
Candidates must also meet the price selection criteria outlined in The Brainwashing Of The American Investor: The Book That Wall Street Does Not Want YOU To Read.
The "15% down" break-point allows you to keep your eye on "Bull Pen" items. (You really need to be familiar with the selection rules to get the most from the Bargain Stock Monitor and from the Watch List program.)
The fewer IGVSI equities at bargain prices, the stronger the market and the more Smart Cash that should be accumulating in the equity bucket of your portfolio. As the list of bargain Investment Grade Value Stocks grows (indicating market weakness), portfolio Smart Cash should be finding its way back into undervalued securities.
If you are following "the MCIM rules" properly, you should be using market volatility to capture all reasonable profits, particularly on high-priced issues.
Opportunities to put "Smart Cash" back to work are few --- but buying opportunities do exist in REITs and MLPs... as a defensive "temporary holding area" awaiting the correction".
When the correction finally happens:
a) Don't be fearful, and stick with MCIM buying guidelines;
b) You should have significant "smart cash" because you took profits during the rally;
c) You should jump on any remaining gains, regardless of the tax consequences;
d) Buy slowly, but start the reloading process immediately.
ACTION ALERT: When the correction begins, add to your portfolio slowly, and continue to increase yields and reduce cost basis in the "income bucket".
If the rally continues, take the opportunity to realize profits on your weaker and older equity holdings.
What's that all about? Check your copy of "Brainwashing" or contact an authorized Market Cycle Investment Management practitioner
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