I'm Out!

As you know from my earlier posts, I have been expecting a correction of some sort in October, and the 4.1% decline in the TSX this past week seems to be the beginning of that. Consumer confidence is down, and even though GDP is up in Canada and the US, that is likely the result of all the government stimulus and not any real improvement in the economy.

I had been gradually reducing my holdings all summer, and I actually sold the last of my stocks (MSI.UN, TRP, and YLO.un) on Thursday. Late Thursday, I actually bought HXD (TSX double down ETF) and HGD (Gold stocks double down ETF) and held them throughout most of Friday's big plunge (the moving average lines said to buy them, so I did, but I got nervous and sold them after making a bit of cash). I sold them before the end of the day, so I actually am 100% in cash right now.

I am not getting any interest at all in my accounts, so I admit that this investing strategy is not brilliant, but I am in capital preservation mode right now, so this helps me sleep at night. If none of the so-called experts knows where the market is heading right now, then how are small investors like me (us) supposed to make investing decisions?

I am still looking at safe ways to make a guaranteed return, and I may just open a high-interest savings account, to I don't tie up my money. High interest is a bit of a misnomer here, as I think I can only get .75% to 1.0% on my money right now, but I can access it any time and transfer it to my trading accounts if I decide to get back into the market on a large scale. This is only my non-RRSP money, and I will use my RRSP accounts first, when I decide to get back into securities (since the gains are tax-deferred).

There are some things I am looking to buy next week, but most of them are the 'down' ETF's. I use the Horizon Betapro 'double' ETF's. The ones that are a buy (or hold) for early next week are HED (energy), HFD (financials), HGD (gold stocks), HQD (Nasdaq), HSD (S&P in the US), and HXD (TSX). Remember, all of these ETF's go UP if there underlying areas go DOWN. I will warn you that if you are wrong on the down ETF's, it does give you a sick feeling when you lose money when the market is actually going UP.

Even with the TSX going down over 4% this past week, and other indices declining as well, it was a break-even week for me since I had the down ETF's.

Well, that is enough for today. Good luck next week, and let's hope the market finds some direction soon (up OR down, I don't care).