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Investment Analysis Clubs / Macro Economic Trends and Risks
|Subject: Re: Portfolio Strategy in a Global Down Draft||Date: 9/15/2008 11:31 PM|
|Author: desertdaveataol||Number: 252188 of 465141|
I should have stuck to the plan ... If I can pick up stacks paying 5-6% yields at the bottom, I should be able to ride them up for quite a few years until we have to rinse and repeat again.
My plan, such as it is, is to keep a big chunk of my money in Vanguard's GNMA Admiral Shares (VFIJX) @ ~5.10% until Oct/Nov when I expect the stock market to stumble over its own untied shoelaces. At that point, with a click or a phone call, I can transfer it in an instant to my Vanguard Treasury Money Market Fund (VMPXX) account which funds my stock purchases through Vanguard. VMPXX pays a penurious compound yield of 1.66% so I don't want to make that transfer until the last minute.
Failing that, I'm expecting the other shoe to fall in March/April '09 when the majority of Alt-A and Option ARMs are scheduled to reset.
Though those events are generally expected by knowledgeable persons, I'm not basing my investment strategy solely on them. I'm buying in (averaging down) as the stock market slides down the slippery slope of hope that blinds it to the realities it has created for itself (and unfortunately for the rest of us too) with its irresponsible behavior. Using new investment money, I bought 266 shares of GE @ $24.93 this morning. That's a dividend yield of almost 5%!
I plan to buy into the downward spiral (with "new" money) until the DJIA dips below 9000 or the S&P 500 is below 1000. I'll consider that a bottom and commit my Vanguard GNMA Admiral Fund (VFIJX) Shares then.
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