Yesterday we took defensive action for most large accounts reducing our net long exposure consistent with our approach of taking defensive action when the S&P 500 breaches its 200 DMA.
This go around was a little different in that we took the opportunity to do some rebalancing, selling of one-offs and for large clients who owned the iShares Global Utilities (JXI), we sold that position--this includes the RRGR fund that we subadvise. JXI has not done very well so we have simply moved on from the name. To be clear we reduced exposure a little but it was also a cleaning up of some accounts too.
For now the slope of the 200 DMA is sloping upward and I think it is pretty clear that they will figure a way to at least kick the can down the road some more on the fiscal cliff issues so I think down a lot is not an immediate prospect but down a little might be. We will take further action a little more subjectively depending on how the market trades and I will disclose what we do here.
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6 comments:
Incredibly vague post - almost meaningless. Can you at least give a sense of what the reduction was -- ie. going from 80% invested to 25% (vs 65% to 60%)
Thank you, Roger. A lot of the traditional, dividend-paying sectors are getting smacked around pretty good.
What is the criteria for reinvesting as it looks like the 200 dma has the potential to frustrate and whipsaw you in the near future. Unless of course it goes up or down soon.
BTW, roger is never going to mention percentages but if you read him regularly think small incremental changes as it goes down
Roger, when in lightening up mode, as you are now, are there any areas where you might actually increase exposure. Thinking about traditional defensive space, such as sin stocks or utilities. Thanks.
11:05 follow-up. Maybe even increasing investment grade bond exposure. Again, thanks.
Correct that dividend paying securities are taking a hit (7:28). I wonder how much longer that will occur?
And where in the portfolio are the proceeds from the sale of dividend securities going?
Is it time for the 99% (sic) to add on weakness?
T
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