Want to know how overvalued this stock market (and implied junk bonds) is? David Stockman's first 5 paragraphs is an excellent description of how overvalued the U.S. stock market is. This is why DYI model portfolio is at its lowest level for stocks at 10%. A modest short position, for those who are so inclined, of 5% to 10% is warranted. You may want to further investigate the Prudent Bear Fund.
AGGRESSIVE PORTFOLIO - ACTIVE ALLOCATION - 03/1/14
Active Allocation Bands 10% to 60%
45% - Cash -Short Term Bond Index - VGPMX
25% -Gold- Precious Metals & Mining - VBIRX
20% -Lt. Bonds- Long Term Bond Index - VBLTX
10% -Stocks- Equity Income Fund - VEIPX
[See Disclaimer]
Please note for those who are first time readers I use Vanguard funds as a proxy for my active allocation model. Also note that DYI are long term investors which implies that changes in the model occur over a long period of time (years as opposed to months). DYI are value players and as valuations change so do we. My investment process is based upon a secular basis, cyclical and especially short term moves are ignored.
DYI
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