For sometime now we have remained fully invested, but very nervous. Starting in mid-September, I have been cutting back on our risk exposure. Our Seasonal Growth model has been in more conservative (lower beta) equities since May. In addition we are now about 25% in cash as well. For our Dividend portfolios I started moving out of some of our more cyclical stocks in September as well. While we may look fully invested, the Toews High Yield Fund is currently 100% in cash. Additionally I continually look at our holdings and am only looking to buy stocks that are particulary cheap.
For those that enjoyed this week’s red moon/lunar eclipse, you might (or might not) enjoy this bit of stock market history from thedailypfennig.com:
“As it happens, we find ourselves smack in the middle of an astronomical/market phenomenon known as a “Puetz window.” In the early 1990s, researcher Steve Puetz looked into eight epic market crashes — starting with Holland’s tulip mania of the 17th century, ending with Japan’s meltdown in 1990 and including the U.S. crashes of 1929 and 1987.
Turns out every one of them took place within a few days of a full moon/lunar eclipse. And each time, that lunar eclipse took place within six weeks of a solar eclipse. (We’ll spare you the suspense: A solar eclipse is
coming up on Oct. 23.)
Puetz ran the numbers and concluded the odds of these circumstances being sheer coincidence were 127,000-to-1.
We leave it to others to debate the validity of the “Puetz window” as a useful forecasting tool. We’ll note here the current one continues through the end of the week. We’ll note further that while epic crashes tend to occur during Puetz windows, not every Puetz window results in a crash.
The next Puetz window, you wonder? Early next April. About six months from now.”
(photo from nasa.gov)