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Monday, December 21, 2015

Risking Thousands To Make Pennies!

This has not been a very good year for me in the market. I will finish the year down around 4%. Some folks did better. Some with exposure to hedge funds and certain high yield bond mutual funds did far far worse. When everyone opens their mutual fund statements in early 2016, they will get a sense of how their year may have gone. If you simply followed an S&P index fund, you started the year at 2058, and you are currently standing at 2012. I do believe that the world economy is slowing, countries with large dependence on oil production are in depression, and I just don't believe one economy in the world can avoid the economic maladies of the rest of the world. Materials and industrial production are clearly showing  signs  of a recession. The chart above pegs the S&P at around 1875 bye the end of march 2016. So, I am going to position  myself for a decline in the first quarter of 2016. That means holding muni's, long term treasuries, utilities, holding two short positions that short the S&P and the Dow (SH and DOG), and lots of cash to take advantage of any flash crashes or long periods of decline. I could clearly be wrong. My prognosticating has been good and bad over the past 15 years since retiring. When companies begin reporting 4th quarter 2015 results in mid January 2016, and begin to project full year earnings for 2016, my hypothesis will turn out to be right or wrong. I also believe that the projected path of the Fed to put us at 1.4% or so for the prime rate by the end of 2016 will also turn out to be completely wrong. They won't tighten much, if at all next year......So, I guess I will let you know how this turns out when April fools day comes in 2016!


TerribleTerry said...

I'm waiting for Rush Limbaugh to stop pimping gold investments and start rallying all the climate change deniers to invest in Real Estate in Florida.

Terrible Dad said...

That's good! You could get beachfront property in the middle of the state soon! Pop