The 10% Solution?

I put up a similar chart on December 13, which was about the last time the S&P 500 turned around at the line drawn in red here. I’ve been saying for a while now that I think a bear market has started. I’ve also been saying that if a bear has in fact started, the way this bear is starting is very typical. The point of this post is about exploring a different concept than just stocks, bonds, cash for constructing a portfolio. Some people might say that in addition to stocks, bonds and cash that real estate (primarily REITs) and commodities should be included. What about private equity? What probably makes sense for most people is some sort of a broad category that is perhaps labeled alternative or other (I’ll take suggestions on a better name). This could take in the following; Absolute return ideas (like a long/short fund) Some strategy funds (like DBV or the Rydex Managed Futures both of which are personal holdings) Infrastructure Plane leasing A Put Write fund (if one ever comes into existence) One of the merger funds (this probably counts as absolute return but this is the type of thing that gets forgotten about) Foreign currency (I include this in cash but some may think of it as “other”) All of these categories (if I have left any out please leave a comment) have both positives and drawbacks. There was just an article yesterday in the WSJ about long short funds that have done poorly this year in a market in which I would think they would shine. Within each segment there...

The 10% Solution?

I put up a similar chart on December 13, which was about the last time the S&P 500 turned around at the line drawn in red here. I’ve been saying for a while now that I think a bear market has started. I’ve also been saying that if a bear has in fact started, the way this bear is starting is very typical. The point of this post is about exploring a different concept than just stocks, bonds, cash for constructing a portfolio. Some people might say that in addition to stocks, bonds and cash that real estate (primarily REITs) and commodities should be included. What about private equity? What probably makes sense for most people is some sort of a broad category that is perhaps labeled alternative or other (I’ll take suggestions on a better name). This could take in the following; Absolute return ideas (like a long/short fund) Some strategy funds (like DBV or the Rydex Managed Futures both of which are personal holdings) Infrastructure Plane leasing A Put Write fund (if one ever comes into existence) One of the merger funds (this probably counts as absolute return but this is the type of thing that gets forgotten about) Foreign currency (I include this in cash but some may think of it as “other”) All of these categories (if I have left any out please leave a comment) have both positives and drawbacks. There was just an article yesterday in the WSJ about long short funds that have done poorly this year in a market in which I would think they would shine. Within each segment there...

Don’t Phreak

In case you haven’t seen this elsewhere, there is a good chance of a delayed reaction from the Bhutto assassination in some of the emerging markets. The US market may have sold down more in the last half hour in anticipation of this. If so, don’t freak out. The event is an outlier and if it does cause a fast decline, history says it would snap back...

Don’t Phreak

In case you haven’t seen this elsewhere, there is a good chance of a delayed reaction from the Bhutto assassination in some of the emerging markets. The US market may have sold down more in the last half hour in anticipation of this. If so, don’t freak out. The event is an outlier and if it does cause a fast decline, history says it would snap back...