Creepin’ Up by Keeping On
By Paul Price of Market Shadows
You Can’t Beat the Indices if You’re Not Invested
2013 has been a great year for the broad market. As of Dec. 20th the Dow Jones Industrials were up 23.8% and the S&P 500 was ahead by 26.9%. That was a great tailwind for investors willing to go ‘all in’ with a 100% equity allocation.
If you held back part of your money in cash you earned almost nothing on that segment. If you opted for physical gold, precious metals ETFs or mining stocks you suffered big losses. Gold hit a three-year low this week.
Ultra-conservative intermediate and long-term government bonds lost money in 2013 on a total return basis. Those who followed the standard stocks-bonds-cash-gold asset mix advice have done much, much worse than the equity market.
At year end you need to measure the change in your overall net worth against the indices, not just the part that was actually invested in stocks. Market Shadows is proud to say we’ve done better than our benchmark, the S&P 500 ETF (SPY) since inception on 100% of our original stake since our inception date (Oct. 26, 2012).
As of Dec. 20, 2013 our $100,000 investment has grown cumulatively by 36.63%.
We sold some winners and bought some new shares for the portfolio this week. See the details of all our closed-out and current positions by clicking here .
Our sale of Korn Ferry (KFY) was seconded by the company’s CEO, as reported by Barrons.com today. A KFY Director was also a substantial seller this week.
Even CEOs can’t call exact tops. By Friday at 4 PM the stock went even higher, closing out the week at $25.95.
Think like an insider. Sell any shares you think are fully valued. Be satisfied and refuse to beat yourself up if a stock goes higher afterwards.
Market Shadows will be more than happy if we can negotiate a repeat performance of this year in 2014.
Note: Our Virtual Put Writing Portfolio has had a fabulous year also. Check out our open and closed-out option positions by clicking here.
