Bargain List Shrinks to "Correction Coming" Levels!
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.
The Monitor clearly documents the cyclical nature of the stock market, as you can tell from the historical data. Whenever the number of IGVSI bargain stocks shrinks to unusually low levels, a correction cannot be too far down the road. Patience is your "buzz word", as smart cash grows and account statements regain all time high (ATH) levels.
Your "Smart Cash" balance should be at or near All Time High levels --- is there a correction finally taking shape!
The short-term volatility that was so productive in recent years seems to be returning. We could use a short and steep correction. If you are following "the rules" properly, you should always be using the market's upward momentum to capture reasonable short-term profits --- and to shed downgraded issues.
You should now be finding some opportunities to put the "smart cash" back to work, but remember that it is as wise to buy slowly as it is to sell quickly.
If you have not been taking profits recently, one of these things is happening:
a) You are being greedy, and ignoring MCIM profit taking guidelines;
b) You have had no profits because you refuse to buy equities during corrections;
c) You foolishly avoid short-term capital gains, preferring to watch them disappear once again;
d) You think this rally is the one that lasts forever.
NEVER LET THAT HAPPEN AGAIN. NEVER!
ACTION ALERT: If the rally continues, don't doubt the wisdom of profit-taking. In the income bucket, use the "year-or-more-income-in-advance" idea as a profit-taking guide AND reinvest the proceeds in similar securities which may or may not have better current yields.
Take any profit at all on your weaker and older equity holdings.
What's that all about? Check your copy of "Brainwashing" or contact the only authorized Market Cycle Investment Management practition
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