Where do we Invest in 2012 and beyond????

Discussion in 'Economics' started by hayman, Aug 18, 2012.

  1. of course you are doing fine, the entire world is up. it's 'risk on'. when things turn bad though the whole world will collapse in tandem.
     
    #71     Aug 23, 2012
  2. when things turn bad I will liquidate
     
    #72     Aug 23, 2012
  3. hayman

    hayman

    Today is the beginning of Bad, although I don't expect Real Bad, until after the US Presidential election.
     
    #73     Aug 23, 2012
  4. hayman

    hayman

    OK, for all of those interested, I am in the process of developing (and forever tweaking) an EXCEL-based model for my investment allocations moving forward over the next 10 years. My primary objective is Capital preservation. Given my objective and the information I have put forth about myself in prior posts on this thread, my current allocation moving forward will be:

    - 7.5 % in US Equity Index Fund or ETF
    - 7.5 % in Global Stock 100 Index Fund or ETF
    - 7.5 % in an US-based REIT Index Fund or ETF
    - 5.0 % in a Gold Index Fund or ETF
    - 2.5 % in an Crude Oil Index Fund or ETF
    - 20.0 % spread evenly into Short-term, Interm, & Long-term
    Bond Index Funds or ETF's
    - 50.0 % in Cash (CD's) evenly split between 6 Mos, 1 year, 3 year,
    5 year, and 10 year CD's

    Now, here's the kicker (and perhaps I will get kicked around for it) - I adjust the above %'s initially (and every 6 months for re-balancing purposes), based on how the Index Fund (or ETF) PRICE is relative to its 52-week Hi/Lo's and the 5-year Hi/Lo's. The closer the price is to these highs, the more risk adjustment I do, and the lower the allocation to that particular asset class. Any downward risk adjustment % for an asset class gets swept into increasing allocation to Cash. My premise here is that the closer we are to HIGHS, the closer we are to correction (spelled, Bubble) for a given asset class. The converse of all of the above is true, when we are closer to LOWS - i.e., get more aggressive with asset allocations, and take away from Cash.

    This strategy can certainly miss a case where new Highs are continuously made; however, the re-balancing analysis that is performed every 6 months, can certainly allocate to an asset class that has made new highs in a prior period, but retraced a bit.

    So, without crucifying me outright, whaddya all think???? This is not final by any stretch, and is a working model at this point.
     
    #74     Aug 23, 2012
  5. now you're talking. What is the oil index etf? Does it invest in oil stocks?
     
    #75     Aug 23, 2012
  6. hayman

    hayman

    I'm still researching, but I'm leaning towards the ETF ticker DBO, which invests in Crude Oil Futures.
     
    #76     Aug 23, 2012
  7. I looked at USO, which invets in crude futures, but it just had too many problems with the carry. I finally settled on buying some oil and gas stocks that a professional I trust (and pay)did due diligence on.

    You know I can't condone the 50% in cash, but maybe when the 1st cd comes due you will be thinking more agressively.
     
    #77     Aug 23, 2012
  8. hayman

    hayman

    Yeah, I know we differ on that, but I just updated my post from 1/2 an hour ago to include a piece I left out......the closer we move towards Lows, the more aggressive the allocation to non-cash assets becomes. To avoid churn and high commissions, re-balance is done twice per year. Again, my premise is Capital preservation near Bubble conditions, and more aggressive when the opportunities present themselves. Of course, if things go up in a straight arrow, this model may not be the best. I'm not counting on that happening.
     
    #78     Aug 23, 2012
  9. if things go straight up everybody will be regretting they didn't do something different

    good luck
     
    #79     Aug 23, 2012
  10. hayman

    hayman

    Thanks!
     
    #80     Aug 23, 2012