Today’s Market Commentary – Time To Buy?

The markets have now officially given back all that they’ve gained over the past year, dropping into negative territory for the past 12 months today. Fear pervades the markets and an attitude of “sell sell sell!” abounds. But that’s not what we’re going to do.

Our portfolios have been rather conservative over the past couple of years – allowing us to ride out the downturn in 2008 and maintain stability ever since. It is time to begin adding more equities (stocks) to our portfolios and take advantage of low valuations. Currently the portfolios have:

  • Core Conservative: 26% Equity
  • Core Balanced: 36% Equity
  • Core Aggressive: 49% Equity
Like I said, traditionally, these are all VERY conservative portfolios. We’re going to begin by adding between 4 and 8 percent to the equity allocations. In addition, we will be hedging this increase with an increase in alternative investments while moving out of longer-term bonds to make up for the difference.
While there is still some inherent risk in the markets, including the Greek default (which is probably going to happen either way,) there has been much positive news coming out recently that the market has ignored: Manufacturing and auto sales numbers are up; unemployment numbers have come in better than expected and several others. If we are in a recession now, the news is probably already reflected in the price of the market. It may be the unpopular thing to do, but doing the unpopular thing is what saved our portfolios back in 2008 when we reduced equities by 50%. And it may be the exact right time, but we’re close.
To summarize, we will be increasing our equity percentage in all portfolios, prudently, to take advantage of these depressed stock prices. Please let me know if you have any comments or questions.

2 Comments on “Today’s Market Commentary – Time To Buy?”

  1. I like your thinking, go Pete

  2. Rita Johnson says:

    Thanks for the update, Pete.
    Rita J

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