Less than 2 weeks until the end of 2010...

With the year coming to an end, the evaluation of the returns from 2010 can begin in earnest. Did your portfolio beat the indices? Did you feel confident enough in the markets to leave your money invested through all the ups and downs? Did you take some money out of stocks and put it in bonds instead?

For me, I am at a YTD return of 7.5% so far this year, so I am behind the major indices a bit but I haven't had to stomach much of the roller-coaster ride the markets took (since I am less invested invested in stocks when the market is weak and more invested when it is strong - but rarely ever fully invested).

I didn't buy any fixed income at all - I looked into it but I couldn't find anything guaranteed that would give me more than .5%, even on a $100,000 deposit. So, I decided that it was best for me to leave it in cash, ready to invest in equities when the moving average graphs dictated it.

Right now, I am about 38% invested in equities. They include BIN, HSE, OCX, OSK, PWF, QBR.B, S, T, TCW, TRP and YLO (about half of which I only bought yesterday and today). All signs point to the markets moving upward but I am always skeptical when everyone seems to agree on the direction that the market will take (it usually goes the other way). I will keep following the moving averages, buying and selling as they indicate, so I may very well be buying more equities on Monday.

Most of the ETF's that I follow (for commodities and the market indices) are in the 'hold' territory but I don't currently own any of them since I got stopped out on temporary weakness. This has me re-thinking my practice of putting in manual trailing stops and thinking about strictly sticking to the moving averages to sell. This is hard to do, however, as you often have to watch your gains evaporate before things move back up again.

I started the year with the goal of achieving a return of 1% per month, or 12% for the year, and I won't hit that target. It does look like I will hit my revised goal of 0.5% per month (or 6% return for the year, and I may even hit 8% if the year ends well.

I likely won't post again before the end of 2010 but I may post if I get some time over the holidays. In any case, I will try to post early in the New Year to summarize my 2010 results.

Will there be a Santa Claus Rally this year?

As we approach the end of 2010, I am sitting at a YTD overall return of 6.3%. After it was clear that I would not reach my goal of a 1% per month return, and I lowered my goal to 1/2% per month, it would seem that I am on track to reach that goal (but the year is not over yet).

I am currently about 61% invested in securities (the rest in cash). I currently hold the following ETFs and stocks: BCE, FTT, HEU, HFU, HQU, HSU, HXU, PWF, QBR.B, RUS, SLW, SU, YLO, ENF.UN and PMZ.UN.

I am sorry to say that I was holding COS.un on Friday when they announced their distribution cut and the gap down at the open went below my stop loss so I lost quite a bit there. I sold out near the end of the day, due to the uncertainty that they face moving into 2011. It will, no doubt, recover somewhat but I don't want to hold it any more.

I am looking at a few securities for Monday - HJU, HNU (although investing in natural gas is not for the faint of heart), and CP. I still want to be invested these days since bad news (mostly about European debt) has not been crushing the market lately as much as it had before. That seems to indicate market strength, to some extent, although I am still only relying on the moving average graphs to decide what to buy and how long to hold it. I still don't rely much on market news at all, although good news (or the lack of bad news) can certainly help you sleep at night.

While 2010 hasn't been spectacular, most of the markets have done reasonably well so I don't expect alot of tax-loss selling at the end of the year. This should help the markets close out the year strong and move into the early part of 2011 in good shape.

We will see what the next few weeks hold, to see how our final 2010 numbers look.

Still in The Game

Sorry for not posting in awhile but other priorities came up (work, personal life, vacation, etc.). I have been following the moving averages all this time and have been getting in and out of stocks. Except for a tough time in a correction in August, things have gone quite well. I am not sure if I am outperforming the market averages or not (don't think I am) but I know I wouldn't have been able to sleep if I was simply fully invested in ETF's that follow the market averages, so that is the trade-off that I am willing to make.

Year to date, I am up 6.3% overall in my accounts, so I can't complain about that, given all the doom and gloom and uncertainty in the investing news every day. I am not sure how long the current rally will last but if it goes into December then there is a good chance it will turn into a semi-regular 'Santa Claus' rally and this usually continues at least into mid-January. I am not sure if it will last this long but I am prepared to be invested fairly heavily if it does.

I was up 1.8% this past week overall, on the strengths of gold and silver, among other things. I sold some securities on Friday, as I had stop-lossed big gains from Thursday to lock them in. I will buy them back if the markets continue to climb (I already bought back HGU, for example, but haven't yet bought back SLW, that had a great ride in a short timeframe).

I currently hold some trusts - BTE.UN, COS.UN, EXE.UN, and MSI.UN, some trusts - HFU and HGU, and some stocks - BBD.B, CNQ, FTT, L, MBT, QBR.B, SC, SNC, and THI. I am 60% invested at this point, and I will buy more or sell more depending on the direction of the markets.

There are some BUYS on Monday, like BBD.B and MBT, but I already own those stocks. Telus (T) is also a buy, and I will buy it on Monday if it is strong in the morning (don't want it to drop back down into DON'T HOLD territory right after I buy it).

I would be interested to hear how the rest of you are doing, and if anyone has incorporated moving averages into their investing strategy.

Mid-Summer Market Doldrums

Well, I hope everyone is having a nice summer. The volatile markets are very frustrating these days, especially with the correction recently that presented a good buying opportunity for the brave (I am not always brave, especially after 2008).

I am still following the moving average graphs and I am pretty heavily invested right now, given the market instability - I am about 75% in stocks right now, with the remainder in cash (although I am looking to buy more this coming week).

Earnings have been looking pretty steady so far, and the worries in Europe seem to have subsided for the most part. Also, China seems to be back buying commodities again (just look at potash companies last week) so that is a good sign as well. With more positive earnings this week (I think that about 25% of the S&P reports this week), hopefully the strong markets continue.

Currently, I am in AGU, ARE, BCE, CCO, CNQ, CP, FM, FTT, HSE, RCI.B, RUS, SC, SNC, TRP, X, WJA, BTE.UN, and YLO.UN. All of these securities are in the 'hold' range (current price above the 40-day moving average) except for YLO.UN which I am keeping for the exceptional yield.

I am looking at picking up some more securities this coming week that only moved into buy territory late last week. These include HQU (Nasdaq ETF), HSU (US S&P ETF), EXE.UN (Extendicare), PWF (Power Financial), S (Sherritt), and SU (Suncor). As I mentioned in a previous post, I now wait until the SECOND day that a security is in the buy territory before I buy, to try to cut down on false buys (quick stock turnarounds). There are other stocks in their first day of buying (BBD.B, LIF.UN, and more) but I will wait for confirmation to buy them.

In any case, I am heavily invested right now so I don't have too many more stocks to buy anyway. I already own 18 individual securities and I don't want to go above 25 or so, so I will either leave the remaining funds in cash or I will purchase more of something I already own.

Year-to-date, I am at 3.5% return (not my high of the year, but close), which is not too bad given the overall market returns so far this year. I am well ahead of the .5% or so that I would have received in even the highest money market funds and I don't wish to lock in my money into anything longer just to get an extra percent or two in return.

Here's to a continuing strong earnings season, and let's hope we get a nice summer rally before all the traders get back in September so we can really make some gains in the last 4 months of the year.

Are the Markets Stabilizing?

After a horrible, choppy May, June has started to look a bit better. I was up 1.6% last week, and I am about 70% invested in securities right now (a high level for me, as anyone who follows my blog knows). Many stocks went into 'Buy' territory during the last week and a half, and I am set to buy more stocks on Monday.

I am currently in BCE, BBD.b, BIN, CNQ, CP, FTT, HEU, HGU, HXU, SLW, T, THI, TRP, ENF.un, EXE.un, and YLO.un (yep, still in the Yellow Pages). Of these securities, BCE and THI are 'Sells' for Monday, HXU, BBD.b, EXE.un, and FTT are still 'Buys' on Monday, and the rest are 'Holds' except for YLO.un. YLO is a 'Buy Soon' but I held onto this one because of the distribution and the balance sheet looks good (the only exception to my trading rules).


After a decent sized correction in May and early June, I am hoping that the markets are in for some gains in the next little while before slowing down in mid-July for the remainder of the summer, picking up again in September as it usually does. At 70% invested, I have more money in stocks than I am comfortable with but I am sticking with the graphs on this one (as I said, last week was good). I have some stop losses in already and I will pull out of my stocks quickly if they start to show serious weakness.

The key in my method is to take advantage of the upswings as much as you can and make as much profit as you can. I never sell exactly at the top but I get out quickly on downswings and hopefully the gains outweigh the losses. If the markets go sideways or down next week, I will lighten the load a bit but if they stay stable or go up, I will purchase more securities.

The 'Buys' for Monday include HFD (I won't buy this one, as the HXU is pointing up), HJU, HXU, BBD.b, COS.un, EXE.un, FTT, LIF.un, MSI.un, and WJA. One adjustment to my method that I have made is that I no longer buy stocks on the first day that they indicate a Buy - I wait until they show two Buy days in a row before I pull the trigger. This has helped to elimate some of the quick 'false Buys' that my method can bring if you buy right away. Another way to do this is to wait until a stock is 3% above the 40-day moving average to buy it but, for me, the two Buy days in a row is quicker and simpler to do.

Here's to another good week coming up...

May Wrap-Up

Sorry for not posting for awhile, but as most of you know, the market has been crazy during the last few weeks. The big daily up and down swings are not good for my method of investing, as I want the market to pick a direction (up or down, I don't care) and stick with it for at least a few weeks (preferably a few months). During the main part of this correction, I did manage to get out of all of my stocks and into some of the 'down' ETF's like HXD and HSD so I actually minimized my losses and made a bit of money during the worst days. Just when I thought the correction would last for a bit, a couple of strong days led me to get rid of the down ETF's and back into stocks.

YTD at the end of May, I was still up 2.5%. This is behind my goal of a 1% gain per month for the year but not bad considering the markets are down YTD for the most part. The goal is to make as much money as possible but to outperform the markets themselves may be a more realistic goal since most people don't do that successfully.

Currently, many of the stocks I follow are in 'don't hold' territory - stocks like Agrium, RIM, Westjet, CP Rail, Baytex, Manulife, Manitoba Telecom, and many others - but I have been buying some other stocks recently.

I currently own BCE, Enbridge Income Fund, Encana, Loblaw, Riocan Income Fund, Rogers Communication, Silver Wheaton, and the ETF's HGU (double gold stocks up) and HSU (double US S&P up). Many of these stocks had a very bad June 1 but bounced back nicely on June 2. This type of volatility is not for the faint of heart and, as I said earlier, is not good for my investing strategy as it gives me many false buys and sells.

For the most part, the securities I own are currently even to up a bit, although this can change quickly. Many investing professionals (such as the ones on CNBC and BNN) are recommending to sell securities into any strength and to sit in cash until the end of the summer. The 'sell in May and stay away' strategy is well known as a summer strategy but I will continue my method and hope for either a summer rally or a correction (as long as we don't get one day up, the next day down I am pretty happy).

I don't think my 1% per month gain average is realistic now, and I am now hoping for .5% per month for the year, which will still substantially outpace fixed income (and the markets themselves, at this point). Of course, the year isn't quite half over yet so anything could happen, but 'an outbreak of stability' doesn't appear to be coming anytime soon, with European debt crises, Korean political problems, the BP oil spill, Chinese weakness, and other issues weighing the markets down. While most people do want the markets to go up, it seems to be much easier to trigger big market sell-offs on bad news (even if it is not really even THAT bad).

May 2010 was only my second down month in the last 19 months (October 2009 was the other one, and I had one EVEN month), so I guess that isn't too bad considering the shape the markets have been in during most of that time. I will continue to use my method, and see where that takes me. You just have to learn to take a deep breath some days, and take it (the losses) in stride.

Behind YTD Target, but back in YLO.un

My overall balance hit a high on April 26 but a weak close to the month (caused primarily by the Greek debt crisis, apparently) has left me at a YTD gain of 3.6% - behind my YTD goal of 4% (1% per month for the year).

I am back in Yellow Pages Income Fund, as I bought back in on a dip mid-week and I am again enjoying the roughly 12% yield (or I do, at least, when the distributions are paid out every month).

I also currently own ECA (Encana), WJA (Westjet), SNC (SNC Lavalin), BCE (Bell), MBT (Manitoba Telecom), THI (Tim Horton's), RCI.B (Rogers Communications), REI (Riocan REIT), and HFU (Financial Bull ETF).

For May 3, the only security that I follow that is a 'buy' is MBT but I already just bought it so I don't need to buy more (yet).

The sells for May 3 include SNC (which I own) and many that I don't own such as HJU, HSE, L, and LIF.UN. Since I don't own these securities, I don't have to sell them just stay out of them for now. Since they are at the sell point right now, a slight gain in any of them would put them into 'buy' territory.

May might be the last month with decent trading action for awhile, since June through August are typically slow months. I would like to make some gains in May before the summer, but I won't alter my method to do so.