If you want to see some scary price action, just look at the chart 5 year chart for the TLT and overlay the S&P 500 for the same time period. The meteoric rise in treasury prices alone tell us that investors are in fear mode again and running for the exits at the stock markets. We have already prepared for this mass exodus and are comfortably waiting on the sidelines in 50% in Cash. Look to begin to enter into short side stock ETF's soon. For now, I am staying away from treasuries as it is likely, I missed the boat on them and they are a bit too pricey for my likings here.
We could see this decline coming in stocks for some time now, but there has been an far quicker reversal in the sentiment around the precious metals. Yesterday, silver officially reversed trends and turned south so I am going to liquidate my holdings in SLV this morning... likely at a 3-4% loss for the year. Disappointing for sure, but I can't argue with money flows and trends. Gold still sits comfortable above any major trend reversal points and despite its recent struggles, it is still "the other safe haven" from a plummeting stock market.
After I make my portfolio moves I will balance my portfolio to 65% Cash (for now), 25% Investment Grade Corporate Bonds (same as it has been) and 10% Gold (Same).
Here is the portfolio performance year to date. Still over 1100 basis points ahead of the market, but disappointingly in the red for the first time in 2011. I am kicking myself for missing on the treasuries, but I am comforted by the fact that in 2008 they dropped off the cliff the second the market started to turn in 2009. I am happy waiting on the sidelines in 65% cash and am ready to pounce when money flows start to change again.
| | Jan 24, 2011 | today | % Change |
| My Portfolio | $99,994.75 | $99,819 | -0.18% |
| S and P 500 | 1282 | 1129 | -11.93% |
| FTSE 100 | 5943 | 5282 | -11.12% |
| Commodities Index (GSG) | 33.99 | 30.29 | -10.89% |
| 20 Year Treasury (TLT) | 92.43 | 123.12 | 33.20% |
