I have been riding  out the ups & downs of the market. I have also added some money to some of my better large cap growth funds. That being said, I have sold some of my bank stock to take the losses on my tax form. After 30 days, I will be buying them back again. I think banks will have among the largest percent increases when the financial sector finally turns around. I also plan on adding to some of my health care stocks, such as J&J, Abott, Pfiser and Novardis.

Justin,

On "growth" stocks, I use a strict sell-stop discipline. That removes emotion from the equation. I set the sell-stop immediately upon buying a stock (usually at 5%-10% below my purchase price), then re-set the stops once per week. If the stock opens up decently, I widen the sell-stop percentage. My "default" percentage is usually 15%. I keep trailing it along behind the actual price (always up, never down).

On dividend stocks, which I keep in a separate portfolio, I use a buy-and-watch strategy. I hold for at least 6 months, then do a portfolio review to see if any changes are warranted. In my dividend portfolio, I'm looking principally at the continuation and raising of each stock's dividend, plus its apparent safety. I'm way less interested in each stock's price than I am in its dividend.

Finally, even though I "know you can't time the market," I do compute what I call a Timing Outlook every two weeks. It has 10 components and is meant to be a short-term predictor (a few weeks). If the Timing Outlook is not favorable, it's rare that I will purchase a stock at all, because I like all my stocks to get off to good starts. 

The practical effect of the approaches above are:

(1) I've been mostly in cash for most of the year in growth stocks...therefore way ahead of the market; and

(2) My dividend stocks are running a little better than the market, with the portfolio throwing off about 5.1% at the moment (based on my original investment).

 

 

  

 

I was looking at Berkshire since it has been down along with the rest of the market this year wondering how it does during recessions. It's performance over the years has averaged 10.8% better than the S&P which we all know is exceptional. If you look at the last 4 recessions for a 3 year period it's performance is even better with a return that exceeds the S&P by around 13%. It would seem to make sense that he would do even better is a tough market because there are more opporitunities. Based on how much it is down from it's 52 week high, this would seem to be a very good entry point.Comments?

I agree with LHixon -- Within the next week or two I will be selling some of my disappointments and using the proceeds to buy a few more shares of Berkshire Hathaway.  I will also be buying some more BAM and FAST.

 

David, interesting system you have....would you consider sharing

it in more detail?

 

I use X-Ray, along with some other tools, to take a close look at my portfolio's asset allocation and performance on a quarterly basis.  Since I'm retired I also try to map my accounts into Ray Lucia's "Buckets" approach to manage the gradual distribution of money to live on as well.  On the basis of these reviews I decide whether adjustments are needed and implement changes accordingly.  My general strategy has been to concentrate holdings in fewer, larger, and (hopefully) higher quality positions (funds and ETFs) over time.  This has yielded benefits as my largest positions have outperformed the market over short and long-term time horizons and have helped to mitigate other losses in the past year.  I'm about 80% in equities and the rest in cash for now.  I have to continually remind myself to resist the knee-jerk reactions to the daily news--I get burned every time it seems when I act on impulse.