ochotona wrote:
I think this is a terribly bad idea. #1 is I don't do single countries or single regions, except for my own (USA). Anything outside of my country I was diversified as widely as possible. #2 is high-yields are getting murdered. #3 is I don't know about high technology as a sector, but the larger question is why do you want to be in stocks at all at this time? How can you call yourself a momentum investor and be playing with stocks? There were very clear momentum signals on 31/12/2015 to get out of the stock market. Did you not get the message?
The gold is good. USA long bonds are good. Cash is good. Everything else is terrible right now. Please don't do it.
The Japanese index fund is at +5,29% over the last 12 month.
The New Technology Sector fund is +33,27% over the last 12 month.
There is hence no signal yet to switch any of these to cash.
I concur, that high yield corporate bonds has been taking a real pounding and fallen -1% since the middle of October but there is only 0,5% fall left before a switch to a more stable bond fund which has been flat-lining since August so I will take my chances and go with the high yield fund until I get the signal to switch.
I know the stock market has been falling since the start of 2016, however it is impossible to know what will happen in the future. I have no idea if it will fall any further. Passive investing and re-balancing would be the only way to know what to buy and what to sell.
mukramesh wrote:
Some other thoughts:
1. Can you implement a US Permanent Portfolio from Sweden? You already hold Gold and US Long Bonds so you are only missing the US Stocks portion; maybe you can find an appropriate index fund. User LC475 believes the US PP is the only 'true' Permanent Portfolio due to the US holding world reserve currency status. Holding cash in your own country's money is probably fine.
2. Consider sticking 90% in a 'safe' portfolio and treat the other 10% as your 'play money' (a.k.a. Variable Portfolio). This play money should never be refilled by taking money from your safe portfolio. Hopefully this will quench your desire to fiddle and you never know, you could strike it rich with this portion.
I do not really want to have a US Permanent Portfolio as I live in Sweden. I am really uncomfortable holding gold and long bonds in another currency. Take a look at this example, the currency risk is huge!
IAU*USDSEK(green) compared to IAU(red)
TLT*USDSEK(green) compared to TLT(red)
However the longest duration of Swedish bonds are 10 years and gold is going to be USD no matter what, so I do not know what to do.
That is why I went with the Absolute Momentum Strategy to begin with. I got a lot of Stock Mutual Funds and Bond Mutual Funds available. I have been all-in invested in the mutual fund which is top ranked 12 month % yield as the strategy dictates. Which is the New Technology Sector Stock Fund which at the moment has at least a 30% fall before there is a signal to switch to a bond fund.
I didn't want to loose any money so I sold when the moving averages signaled a down-trend. Regrettably, I have end up as an active trader, something I definitely do not want to be doing. No one knows when we have reached the bottom but I am of forced to enter when the moving averages signals an up-trend yet again. Understandingly, I am very nervous to go all-in again. I will risk getting whipsawed along the way to the bottom if I do so but there is no way to know how long an up-trend will last.I suppose getting whip-sawed on the way to the bottom is better than getting decimated.