It was another good week for the Self Investors Model Portfolio and I continue to tread lightly here, not making large bets on either side. For the week, the Model Port outperformed the S&P500 which was down 2.2% over the past week, VS. down .6% for my portfolio. That drops the year to date performance to 29.4% which is still 10 times the return of the S&P.
The losses were mitigated this week with my short hedge positions, led by AIRM which was closed this week for a quick 14% gain. I am looking to replace this short position with another possibly tomorrow, depending on the action of the overall market. Today, I did add a small long position in a leading stock.
The longer we stall here, with the Dow and S&P submerged below their 200 day moving averages, the greater the likelihood we’re testing those November lows BEFORE testing those December highs. The market seems to be a bit in no man’s land with the bears exerting some control, but the bulls looking like they could strike and stage a year end holiday rally at any time. If the bulls are going to run, they better do so very soon. If we take out yesterday’s lows, I may close out a couple long positions as well.
At this point, I don’t really care what the market does from here to the end of the year. I’m going to maintain a conservative approach and sit on around 40% cash. If I don’t make another dime from now until the end of the year, I can be satisfied with the 30% gain here in 2007 and looking forward to next year when I anticipate a shorting strategy will be critical. I’m ready and waiting. Bring it on bears!
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