Window-Dressing Wednesday – Can the Indexes End August on a Positive Note?

We're down a lot for the month.

We're down a lot for the summer, in fact as the S&P 500 (/ES) was at 2,971 on July 1st, 2,980 on August 1st and on May 1st, we were at 2,952 and today at 2,860 so we could have, in fact, sold in May, gone away and had a great, long vacation – instead of feeling very much like we need one after treading water all summer.  

In our Mid-Year Portfolio Review our main Long-Term and Short-Term paired portfolios were at $2,093,568 (from a $500,000/$100,000 start in Jan, 2018) and our strategy was to stay neutral in what we thought would be a choppy market and now, two months later, the LTP/STP stand at $2,075,462 but we've moved $100,000 more towards cash in the LTP and $75,000 more to cash in the STP so we've lowered our exposure while also taking advantage of dips to roll our long positions as planned when I said in early July:

That's our very simple long-term investing strategy in a nutshell.  Stocks cycle up and down and we almost automatically take advantage of the dips buy buying bigger positions and because we usually sell calls to cover our positions, we tend to set realistic targets for our exits though that doesn't prevent us from setting up new positions using SOME of the cash we made on the first round.  The bottom line is we don't just let our risk expand – the system keeps the cash moving down to the bottom line…

So staying even(ish) and moving $175,000 (8.3%) back to CASH!!!, where it's safe, was a reasonable way to spend our summer but, on the whole, I would have been happier hiking in Norway or something else far away from all the nonsense going on in this country.  Then I could have come back to work on Tuesday (Monday's a holiday!) and said "Oh, is Trump still President?"   

We did a little bit better with our Options Opportunity Portfolio, which was featured over at Seeking Alpha and was initiated on Jan 2nd, 2018 with $100,000 and, as of June 17th, we had run it up to $276,735 and, though we were also cautious with the OOP over the summer, we didn't take as many…
continue reading