SD-2020 TRADING WITH THE TIDE

[sd]

With today's market pause, I have raised stops on all positions. Very nice capture on a limit sell (8) in TSLA today - still holding 4 shares- I was thinking a limit at $475, but then realized I was asking a lot- and settled for 544.00 I think my recent entry was in the 424 range- so a decent gain - remaining 4 shares at $520- perhaps can see that limit sell at $475. IB allows me to have bracket orders- both a limit sell and a stop-loss- but not in Vanguard. With Tech losing steam today, and I hold a large % focused in the Tech sector , seems reasonable to tighten a bit- Most position stops will be just below the 10 ema.

[ira85]

SD,
I had not thought much about my decision to hold MO. You make some excellent points about the costs of such a buy and hold strategy. I got to thinking about the difference between a trader and a buy- and-holder. A successful trader follows a logical analytical process studying charts with a goal of only holding rising stocks. The analytical process intends to identify rising trends and identifying those that are falling and moving toward a downtrend.

The trader is trying to cut losers early and keep winners. He uses data and performs a logical analysis. His decision should be based on proven analysis and portfolio management tools, such as stop loss discipline. What does the buy-and-holder do? It strikes me that the goals of buy-and-hold are very similar. A big difference is the time intervals for analysis. The trader holds a stock for shorter periods. The buy-and-holder analyses a stock before purchase looking at lots of fundamental data. Some of that data changes often, but some of it rarely changes. They look at the company's business, competitors, product line, financial health, earnings, expectations. When satisfied the company has what it takes to be successful and maintain profitability the buy-and-holder buys. Compared to the trader the buy-and-holder takes a long time to reach the confidence level to pull the trigger and buy. And when doubts arise about the company's performance the buy-and-holder takes a while to analyze what's wrong and whether it can be fixed.

The trader and the buy-and-holder primarily differ on the data they study and how quickly they reach buy/sell decisions. Both want to hold only winners and both want to sell losers. The trader makes peace with the fact he will buy some losers. And he makes peace with the fact he will have a good deal of turnover. Turnover doesn't hurt much if you are successful in keeping losses small. Buy-and-holder Warren Buffett hopes to do a very effective analysis before purchase so he ideally will hold forever with very little turnover. But when results show a business is on the wrong track and can't be fixed, he must sometimes sell a holding.

It occurs to me the difference between traders and buy-and-holders in real life may be less important than how successfully they follow their system. The smart, conscientious trader may develop a system that is very effective. But if he doesn't monitor his system frequently, he will miss important turning points. He works with it almost daily to make sure he doesn't let a problem go unaddressed for long.

Successful trader: Paul Tudor Jones made $100 million by shorting stocks during the crash in 1987. The crash started and ended very quickly. It would have been easy to be right about the market going down, but missing it do to the quick timing.

Successful buy-and-holder: Since 1965 Berkshire Hathaway has had 19% annual growth of book value versus 9.7% for the S&P500. Berkshire is widely respected for their ability to distinguish between dying companies and beaten down companies that can be successfully revived and returned to profitability. Berkshire's buy-and-hold approach to deep value investing has certainly proved to be successful.

To be successful with either the traders approach or the buy-and-holder requires time and effort. Perhaps my investing under-performance is due to laziness more than my failure to change from buy-and-hold to trading. I have no written investing system. I have no written targets for my portfolio. No written buy or sell discipline. That might contribute to some under-performance.

SD has written about how he uses writing to organize his thoughts. I have been reading SD for years, but I hadn't thought until now about how I was reading about his investing more as recreation than self-improvement. I think lots of people do that with the Food Channel. It may also be true for CNBC. I know more about investing than I actually do.

I may be on to something here. Maybe I need to organize my thoughts and put together some measurable goals to improve the performance of my IRA. I used to eat donuts and ice cream almost every day. But I made some changes, lost 40 lbs and kept it off. I'll let you know what happens with my IRA.

[sd]

Good insight Ira,
And making some financial modifications as you did with the diet may be worth considering as also to be beneficial.Similarly, reviewing the IRA positions as requiring periodic review is healthy- Even Warren evaluates and takes action as needed. I liked your analysis of the criteria for Buy and Hold vs Trader- Warren Buffet is certainly a legendary example of Buy and Hold investing, but he also sells when it is warranted by changing conditions- Valuations too high , or the prospects for a company no longer meet his criteria. Warren's advice to personal investors is to 1st invest in the S&P index fund-vs - buying individual stocks-and that is reportedly his recommendation to his heirs-
Consider that BRKB has the staff and business acumen to select from the most promising companies and the insight to delve into the balance sheets and properly evaluate a prospective company for investment- Owning BRKB vs a few individual companies is like owning a value oriented mutual fund-
However well past performance was, does not guarantee future performance- For decades Warren didn't buy any Tech-because he "didn't understand it" but then changed and invested in AAPL- Held it through a large decline and then started to sell some off this fall - He proactively manages his investments- taking some profits- and losses- This last year headline:on his ability to hold: followed by some selling this fall.
www.cnbc.com/2019/01/02/buffetts-berkshire-set-to-lose-about-2point8-billion-on-apples-after-market-drop-.html

Analyzing one's approach to developing a portfolio- whatever the focus- is typically not a "set it and forget it " approach-
There is often a need for at least a quarterly review and rebalancing of the positions as warranted.- That's assuming one holds a diversified portfolio mix-
It is worth mentioning here that you can likely get a free portfolio review from a financial professional- a Fiduciary- that of course would like to have your business- Here in my area in NC- Multiple firms offer a free analysis and prospects of how they could lower your Risk- and improve the results potentially. I interviewed with several and actually took one up on their offer- and invested some IRA assets with them- They are now my personal "benchmark" vs how I personally manage the remainder. (I'm relatively pleased my my performance/Risk results).
Warren's exceptional historical results from the past have not been quite as impressive in recent years-
1st comparative performance from 20 years ago. Very impressive!
i.imgur.com/YJxOoBg.png

Compared to the decline that ended in 2009- it appears to be a different story: BRKB underperformed if started at that time.
i.imgur.com/dDCulNb.png

5 year comparisom:
i.imgur.com/lxB5DYq.png

2 yr - comparisom
i.imgur.com/sTmXdaz.png

The 1 yr chart off the lows- Note that during declines BRKLB is not any "safer" to hold-
1 year :

i.imgur.com/qEHB7L9.png

Point of all the charts is to demonstrate that what once was the best place to be positioned- doesn't always remain that way- and is worthy of a periodic review. As they say about investing- past performance is no guarantee of future success.

Comparing the trend and performance of MO vs SPY :
i.imgur.com/UJLXSje.png

Comparing MO on a weekly chart to itself- and the moving averages: The price bars are removed for clarity:Easy to see when the trend lost it's upward momentum.
i.imgur.com/gnyxB8C.png
And- adding the price bars back in:
i.imgur.com/HHNbm3J.png

These are WEEKLY moving averages- and they capture the primary moves- and define the primary trend direction-consider -despite the periodic volatility on a week by week basis, where the weekly price bars penetrate the emas, notice that the emas tend to smooth out the price bar volatility-

Thanks for sharing your process of being objective and willing to step outside of the comfort zone.
I would do some comparisons with positions you presently own, and perhaps consider a comparable low cost ETF's performance.
I think the backtesting procedure is very useful- and- as an investor vs active trader- would recommend comparing with the weekly charts to get perspective with less noise than the daily.
Let me know if there is something specific you want charted-SD

[sd]

i had elected to tighten the AAPL stop which got taken out today - A nice gain, and the stop was pulled up just under the 5 ema -310- was not my typical wider trail under the 10-20 ema- However, I hold a substantial gain, noted that AAPL has been on a very strong trend, and just got downgraded- i often don't listen to analysts as a rule- but it prompted me to consider the length of this move, the net gain I have, so I trailed a tight stop under the 5 ema , and it got activated today after a push higher the prior day.

[ira85]

SD wrote "you can likely get a free portfolio review from a financial professional- a Fiduciary- . . "

I'll have to consider that option. A robo advisor would be another consideration. As I think about talking to an advisor I recognize I have a problem with history. I know the US had a market crash in 1929. The market bottomed in 1932, having lost 89%. It took 25 years for the DJI to get back to pre-crash level. That is not a black swan. I know Japan had a low interest rate fueled real estate and stock market bubble in the 1990's. The Nikkei 225 almost got to 40,000 in December 1989. Then the bubble burst. We are in year 2020 and the Nikkei is at 23,950,about 40% lower 30 years later. I remember analysts saying it takes a long time to clean up after a real estate bubble. Lots of bad credit needs to get resolved to get real estate back on solid ground. The movie “The Big Short” showed a stripper in Las Vegas who owned several rent houses. Weak home owners quickly found they couldn't make their house payments when their tenents couldn't make their payments, It looked to me like the U.S. real estate bubble would take years to work off. I thought we might well have a Japanese still deflationary recession lasting years. So when the market took off to the upside in 2009 I let it go without me. I was convinced the underlying credit problems had not been resolved. In fact when everyone saw that V shaped graph showing strong market gains after the 2009 bottom and were relieved, I kept expecting a re-test of the lows, and either more losses or at least some sideways base building. I didn't know about the power of Quantatative Easing.

It seems that knowing something about the history of crashes, recessions, and recoveries hurt me after the 2009 bottom. I raised cash a few months before the crash. I was patting myself on the back all the way down. Then the problem became getting back in. My fear of course was that sitting on cash for 10 years will end with me finally giving in, buying high, and suffering new losses due to buying too late in this cycle. Before buying I want to know what defensive plan we can develop to get back out when the big one comes.

I know SD monitors his indicators and has demonstrated how it really works in real time. He WILL sell when the charts show a trend change. It cost him on the AAPL pull back. But it would have saved him had that situation turned ugly. I guess I would need an advisor to show me he understands the defense and he will play it. What do you think I'll find?

One more thing, people sometimes call these big, multi-year recessions and market crashes once-in-a-lifetime events. Well yes, it might be rare enough that many people only see one. Most Japanese investors won't live long enough to see another. And the factors facing the US markets in the next few years are formidable. Our population is aging rapidly. Many people with good jobs and benefits are retiring. The workers just starting their careers face an economy with fewer high pay jobs and record student loan debts. Millions of baby boomers will be consumers of health care resources instead of being workers paying into health care insurance. Our demographics are terrible. Many cities, counties, and states will be insolvent in a prolonged downturn. Instead of retiring with a pension, many will retire with an under-funded plan relying on a rising stock market. And the market will have a huge group of stock holders who are net sellers. In fact many will face mandatory stock selling, i.e. mandatory minimum withdrawals. The list goes on. The point is there is good reason to think the next recession could well be a once-in-a-lifetime big one. Better to plan for it rather than deny the possibility.

I'll look into an advisor. -ira

[sd]

I get the concerns - I similarly managed to get the ira mostly into money market / cash in October 2007- missing much of the down trend due to listening to guys like Gartman and several others that made strong bear cases- And Like you, I failed to get back in in 2009- thinking another leg lower was inevitable- I eased back in gradually-
While there are many reasons to think this economy is unsustainable- QE and such may keep this bull alive - and technology may alter the structure of business in ways we can only imagine to be sci-fi presently -including healthcare, robotics -automation, - Easy to have that perspective on the negative-
From a practical perspective- cash is a net loser due to inflation eating away at your purchasing power. Vanguard has one 4 fund approach that covers the entire world stocks and bonds- for the broadest diversification -
A portion of funds in a fixed Annuity can offer low returns, but safety- and long term cash flow- Have to compare annuities though- and be certain the advisor is a true fiduciary- Also- check out RicEdelman... he doesn't like annuities in general- but offers sound investing advice on his podcasts=
www.edelmanfinancialengines.com/ric-edelman-radio
I'd check out several advisors though- not just one. Sometimes a robo advisor does not provide tailored advice-for your specific goals-

[sd]

While I have elected to put the Horse Race to pasture, I may continue periodically to write here-- as time permits- Or Not- Have done so periodically for such a long time- perhaps just self-indulgent ....
In some respects i hope that what I can share will benefit one of those that bother to read these periodic posts.
Just picked up a new boat today- 17-8 Carolina Skiff with a 70 hp Suzuki- and the wife and I intend to spend as much available time as we can on the local lake- and perhaps a run to the sound now and then. We both enjoy fishing, but the wife is much better than I- Work that around the day job I still hold- my ultimate goal is to work far fewer Saturdays, get the 529s in place for the grandkids- and be certain that we will never be reliant on our children for our financial/health needs as we enter the "Golden Years" I trust that will be more than having to Pea more often-
As Ira shared in his prior post- we all have a certain fear - at least those of us that saw the 2 big market declines in the 2000 decade- The Fall of Tech- which ate my lunch- I had actually thought back then that I could trade for my living because it was so rewarding- I did not realize that stocks could actually lose money- and very quickly- Back then, you bought what was in the news and it went Up and Up- But that was the Top of the Tech bubble- I had seen a big gain in my trading -IRA account- and proceeded to give it all back plus a large chunk of what I had put into it over the prior years- Hard cash - The Fall of Tech in 2000-2003 was just gut wrenching- The housing bubble in 2008 took down everything - on average- even bonds lost 35% of their value- literally no good safe haven- and the advisers that managed your investments generally took a Buy- and Hold- approach-
but few were prepared to see 50% of their retirement assets melt away- at least on paper- Those that Sold -particularly late in the decline- took a large loss- as the buyers on the other side of that trade were value buyers- They did not know when things would turn better- but they knew that stocks were being sold at a discount- It could have unravelled into a Global Fiasco- but as deep as it went, those that stayed the course- and those that kept putting monies every month into their IRA accounts- also got to make purchases as prices were being discounted-
But the damage was done- The psyche of those in that decade was etched with 2 large market declines- The mantra of Buy and Hold that is the gospel of those that manage your monies for a fee- and they make their % gain whether the market and your account is rising- or falling- While the investor carries all of the Risk on his or her shoulders.
Combine that with the growing awareness by the retail market- you and I- and the average Joe and Sally- that the reality is that the mutual fund industry- with it's 5.75% commissions for individuals handing over their hard earned dollars to invest- and high expense ratio funds with slick brochures and advertising- were actually not beating the market with their high cost professional managers-
Indeed- Truth can be slanted- Our company had a financial presentation a few years ago and one of those slick graphs that compared the Investment Company's fund against the S&P 500 index accurately showed how much more a $10,000.00 investment into their specific fund would have outperformed the Index- The presenter failed to point out the difference-that The small asterisk at the bottom of the page noted that their fund results included the dividends reinvested- That's called the TR-Total Return- However, there was no dividend reinvestment included in the Index- Had they compared the Total Return with the SPY, which includes dividends reinvested. they failed to outperform at all...and charged a nuch higher commission to purchase and higher expense ratios, 12-b-1 fees etc.... .One can purchase the SPY for an extremely low fee- or Vanguard's VUG that replicates for just an .04 low fee. investor.vanguard.com/etf/profile/VUG- And with free-no commissions to transact trades- this is the best time to be engaged as an individual investor managing your own account- Note that morningstar.com has a section where you can compare mutual funds true performance vs the benchmark index. Vanguard also offers low cost mutual funds with active management- or- for a small fee, offer to manage one's account. (Need a minimum of $50,000,00) for a low $.30 fee investor.vanguard.com/etf/profile/VUG
The low cost passive approach is likely the best outperformer after fees- but a passive robo advisor will simply "fit" the investor into a certain category based on age and a Risk questionnaire- and allocate them accordingly- similar to Target Date Funds- and these are ideal for those that do not want to bother to get involved in the process- but know they need to invest .
A financial adviser that is indeed a fiduciary will help the investor take an accurate assessment of their goals, their age, and help put perspective into an individuals personal circumstance- The added value of such an adviser is that they can provide a balanced perspective- place the investor in an appropriate asset allocation model that complements their Goals and recognizes their fear/Risk tolerance. That asset allocation model should not be a fixed model- but have periodic rebalancing included- annually at a bare minimum- potentially quarterly . Holding a diversified portfolio is designed to reduce one's overall RISK- so the goal is not to be loaded all in with just the best performing funds-but to have a wider allocation- that over time- with rebalancing, should reduce the portfolio's volatility.

A few years ago, just as the fiduciary standard was nearing implementation, the firm managing our company's IRA account was not in compliance and struggling to become compliant. It turns out they had to disclose the higher fees and higher expense ratios they had been charging- and had to modify their corporate structure- - Hedge funds used to charge their clients an average of 2% of AUM and 20% of the net profits- but many have underperformed for years.

I ended up withdrawing the majority of my IRA funds- Opened a brokerage IRA account with Vanguard, and simultaneously put a large % of those funds in the hands of a Fiduciary asset manager- I was hesitant initially to manage those funds- afraid to lose -but I now manage those Vanguard funds that include the IRa and my combined Roth IRAs as well as my wife's Roth account. The Fiduciary manager that manages my other portion of my account and my wife's is now also my personal benchmark for performance and RISK- They charge a .70 management fee and use institutional funds-- @ .70 - I've been able to outperform my more conservative " benchmark-" for the past 2 years as my now active management has taken place gradually.,
Correspondingly- I primarily focus the majority of my funds in low cost Vanguard Funds-and now include a few momentum stocks .
I've mixed Vanguards exceptionally low expense ratios ETFs -With a few other smaller investment funds with much higher exp ratios- Some ARK funds seeking periodic greater momentum- and invest/trade based on a momentum approach- that I think finally gelled - during this past year-as I truly became more active, more focused, and increased my allocations %.
Is it worth my time ? Valid question- As I attended a funeral this week for the founder of our company, and his wife encouraged me to retire while I could enjoy my good health- with my wife- Well, what is the need ? Is it financial, or is it the Fear of not being fully prepared that drives one?

If one is younger and reading this- I would recommend to keep the investing maxed out in Broad market ETFs - and continue with 15% annually to do so- Get that employer match, but then fund the ROTH in a brokerage account (Vanguard) And fund the trading account with a pittance- say 10% - and see how long it takes you to overtake the investment account-
As investing goes- Slow, steady, and consistent - and generous- will win the race - Set fear aside of the possible gyrations- minor noise when one has decades to stay the course.

[sd]

I've finally upgraded my present positions in a new chartlist- SD-Vanguard 2020 chartlist and included my wife's positions as well , as we generally hold some of the same funds- and she allows me to "manage" them. A number of these are very recent adds or reentries after having been stopped out .
I'm linking this to be a public chartlist- at least to demonstrate the type of momentum approach that I hope to keep up with in 2020.
This also provides about 20 examples of the simplistic approach to upside momentum trading/investing- We'll see how it unfolds ...

FWIW: I will temporarily upload my actual 2020 stock & etf portfolio AS a public chartlist- SD Vanguard2020-
I will post the link here- www.stockcharts.com/public/1675108
Questions or comments address to [e-mail]- or in this strategies thread 2020.

Trades I am in process with: A repurchase of AAPL after stopping out at $310.00 - It is now above $317- I had tightened the stop above the 20 ema and got taken out on the minor downgrade/pullback- The trend may go to the higher new 360 target- new analyst upgrade- but I will still only rely on the price/ema action- and keep the stop trailing and adjust accordingly-
VPU- utilities - is breaking out again- potentially a defensive move.

[sd]

I missed TSLA today- A buy-stop 518- limit 525- it gapped higher today and had a 528 low- it's back where I sold it.
I may try a limit $530 (6 shares) to see if It retraces-
Did add 50 ARKW $63.17- Compared the arkk funds and ARKW has been strong- and I have exposure to most of the other ARK funds.
VWO hit my stop-loss- sold 103 $44.97
Reentered AAPL 10 $319.03
Bot- VPU 19 $147.58

[sd]

1.23.20 Added some AAPL shares today in both accounts- It's overvalued at 24x and earnings next week- but I will tighten the stop -
Market guys point out that the market is trading at the historical high end of the range for PE overall- and that the enthusiasm is near a historical peak- almost- I also added VPU- utilities-
Present scare in China has taken my recent adds in KWEB, Bidu, BABA lower- but I elected to not stop-out on this initial pullback- perhaps a mistake- but a smaller % overall of positions- I adjusted some mutual funds exposure to the emerging mkts by allocating a larger % to thoise funds that have been outperforming over the past 90,60,30 days- momentum leaders- Used the PERF CHART feature in stockcharts-
The Utilities is a defensive sector- presently rising- The TLT is perhaps finally staging a breakout - but I'm not going there-yet.
I have to be careful in what I tend to believe- as I am optimistic overall about where 2020 takes us- Not blindly so, as I will continue with trailing most stops- but I think the Global market place will continue to post good growth as technology expands across the globe-
I stopped out on ARKG- the genetics biotech today, but I think that field has huge long term growth- just volatile- Today the news continues about the Corona virus in China- and the potential for a global pandemic- like SARS-Ebola, and the other biological scares coming out of Africa/China in past decades- Tech index is still leading - the broad sectors- While it all appears very disruptive, will it be a leading headline in 30 days? I would hope not- Thus the rationale for not engaging the stops on the China positions as likely just a short term reaction to this event- Not something I would normally do- but I also recognize that the quick reaction is almost always the wrong reaction to similar events-

[sd]

While I hold VHT healthcare - XPH has a greater momentum- recent month- adding XPH
I like using the stockcharts PERF as an easy way to compare...

[sd]

1.26.20
Corona virus is Front page with some world wide exposure to what is called the latest "Deadly Virus" While the world wide deathtoll is over 50 people presently. I get the fear- it's a similar virus to the SARS which had a 10% death rate- I was surprised that over 8,000 people have already died this present flu season ; with very little fanfare: www.cdc.gov/flu/about/burden/preliminary-in-season-estimates.htm

I made a technical mistake in the China positions I entered this past week- KWEB, BIDU, BABA- all which were trending higher on the entry, but reacted to the Corona virus news and sharply declined- i failed to initiate the stops as i normally would, thinking the volatility would see a quick rebound- but I was mistaken- - Today I initiated the stops just below the Friday lows and expect to see those stops hit as the virus scare continues-
The best stop is indeed the 1st stop- These were also relatively small % positions- but in principle, the parameters should have been followed- and a reentry could have been taken at a lower entry price.

Tightened the remaining stops- This week was not a major stock focus- but I took a position in VPU- and increased it- as a defensive play- I added XPH but the VHT position stopped out- Counter intuitive thinking- I would have expected the healthcare sector to get a boost from the corona virus-
I had shifted some allocations in the company IRA to be more inclusive of those funds showing greater momentum - all with a primary foreign mkt exposure- emerging mkts Holding these positions in mutual funds and without any stops possible- but they had netted a decent % return for 2019 thanks to no interference from me.
Had some break-in boat time- today- and -all-in-all- I feel i would like to reserve the investment focus to a few minutes a day only, and reallocation possibly on the weekends-Of course, that's easy to say when we've been in such a benign trend - Lost a little in net asset value with this week's pullback- and will lose a bit more if we continue lower Monday -but i now feel it's a very minimal % loss with stops updated across the board.
Essentially, stops were set at the low of any Red bar- and tightened on any drop below the fast 5 ema.

[ira85]

As a follow on regarding my IRS under performance, I'm 65% invested and 35% in cash. The investments are all stock or stock holding mutual funds and ETF's. No bonds. My three biggest holdings are IWO, VHT, and MO. IWO is 18% of my portfolio, VHT is 19%, and MO is 7%. My worst performing holding is a real stinker, URA. It's an embarrassment to admit holding it for a long time. A couple of other major under-performers I've held for a long time are MITK and WAFMX.

I got to thinking about MO. One of the things I love about MO is that I bought in on a DRIP plan years ago. So I get the magic of accumulated dividends buying more shares and dividends producing more dividends. I think its a little like whole life insurance. No one gets excited about whole life insurance, but over long periods of time it can do great things. The DRIP plan for MO gets the magic of compound interest going. When you look at the typical stock chart all you see are the changes in the stock price. The impact of the dividends paid gets lost. And that magic of holding for a long time isn't reported anywhere. As the price of MO stock has fallen, the dividend has risen. So on the DRIP plan, each time MO pays a dividend, I buy more shares at a discounted price. More shares bought because the stock price is much lower and more shares because the dividend is higher. As long as MO remains a stable company in no danger of collapse, this is a great system.

I'm going to do some work on how to prepare for the day when the short and medium range trends turn down. Should it be to sell and raise more cash? Or maybe buy some ETF shorting an index? Or maybe switch into ETF's holding defensive assets expected to do well in a major correction? I read a little Brian Livingston "Muscular Portfolios" today. SD's suggestion. -ira

[sd]

HI IRA,
"I'm 65% invested and 35% in cash. The investments are all stock or stock holding mutual funds and ETF's. No bonds. My three biggest holdings are IWO, VHT, and MO. IWO is 18% of my portfolio, VHT is 19%, and MO is 7%. My worst performing holding is a real stinker, URA. It's an embarrassment to admit holding it for a long time. A couple of other major under-performers I've held for a long time are MITK and WAFMX.


Thanks for sharing- It is curious how you ended up holding these as your "portfolio" in that account- it's an odd mix if you don't mind my saying- IWO is the Russel 2000, essentially smaller caps- typically considered more volatile- VHT- is Vanguard healthcare, MO is a tobacco stock- URA is a speculative subsector focused on Uranium,
MITK similarly is an individual stock /Application software
WAFMX- emerging frontier markets fund apparently totally oblivious of the corona virus.

We could compare this portfolio against the traditional stock market by comparing performance to the SPY ETF. The S&P 500 fund
The chart illustrates the 300 market day performance of this portfolio: As you can see, the portfolio listed underperforms the broad market index-
i.imgur.com/tIvV8UD.png

"I'm going to do some work on how to prepare for the day when the short and medium range trends turn down. Should it be to sell and raise more cash? Or maybe buy some ETF shorting an index? Or maybe switch into ETF's holding defensive assets expected to do well in a major correction? I read a little Brian Livingston "Muscular Portfolios" today. SD's suggestion. -ira


So, consider that the MO approach is \the only well-defined aspect of this "portfolio" with an actual rationale to hold based on the dividend accumulation- but the remaining portfolio does not address any dividend appreciation approach- and -as can be viewed by the Perf chart- virtually everything is underperforming a simple purchase of the broad SPY index..

My view is that the trends in most have already turned down- and I would definitely not try to short the market via an ETF that is designed to do so-
The individual positions that are listed do not represent the market - I would not recommend holding these any further as they are in a decline and they underperform the broad index- The only winning position is the fund- WAFMX- and that has the absolute lowest Morningstar - 1 star rating- despite it's positive performance-
If this is actually a valid representation of a portfolio you really own, I would recommend seeking a target fund through Vanguard- or Fidelity- and allow that fund to manage those assets- It is such a mixed portfolio of underperforming assets that can be simply corrected by one shift into a target date fund- that would position you more appropriately into market exposure appropriate to your Risk/age /etc/. If the asset base you own meets the Vanguard minimum- I would consider talking with an Vanguard advisor to take management over those funds-

In my opinion- the absolute last thing you should consider is to take a market short position using ETF's or any other format- This minor volatility should be short lived and you would be caught on the wrong side of a market rally.
Thanks for posting- and keeping me active-
I think the Brian Livingston approach has merits- however- it's too broad and simplistic - for my tastes- I think picking sectors in favor can capture the biggest movements:
I've found that overweighting technology has been the best producer of returns -this year- but i have not been all-in technology- Also held other sectors-
Today's market decline put me 90% into cash and in a waiting mode to see what evolves- at about a -3-4% from the highs to where i have stopped out-
Personally, I think individual stocks bring about an inordinate amount of risk in a portfolio- Dividend appreciation is also risky- unless one has a methodology to select the better dividend producers and an dividend asset allocation that can hold 15-20 different positions- But you can purchase just one ETF to cover aristocrat dividend appreciation- vs trying to purchase the best 1,2,3 individual dividend companies.

Don't try to short- that is simply an emotional reaction- at best shift some allocations into bonds- TLT or Utilities- XLU which pay a dividend.

1-28-20 Edit -Add:

While I think I try to be constructive- each of us holds a different perspective as to what is appropriate for our personal situations-
If I want to be an 'active' investor/swing trader, I need to be able to compare my positions, weed out those that underperform, and overweight those that have positive momentum pushing them higher- I personally will overweight a major index and underweight an individual stock- because of the higher "RISK" that an individual stock presents.
If one holds an index, compare that index's performance to the other indexes- For example- Spy had a 28% return in 2019- but technology- QQQ, VGT- did much better- - and with lower Risk - than holding an individual stock- As the tech sector led , sectors such as energy lagged- With the broad market
S&P 500 index representing some stocks from every sector- for it to have performed so well, mostly led higher by Tech- the top 5 tech names making the biggest net gains - With AMZN being the one big laggard this year.
It's easier to compare the 11 sectors- and stockcharts - Julius Kemper covers the relative rotation and Their other contributors- also cover what is moving the markets-stockcharts-TV is a great resource- as are the weekly e-mails that one can subscribe to-
It's also easier to compare among the 11 market sectors- and find the leadership areas- and then an index that follows- Typically the broad indexes are a good starting point-

A diversified portfolio is one that should periodically get adjusted - but it's difficult to really find non-correlated asset classes it seems-
So, If Tech was really such an outperformer- Why would one sell off the outperformer to only purchase the lagging Energy sector? It seems that the past asset allocation rebalancing model may not be in harmony- and it's best to do the Livingston approach- stay with what is working- and overweight the areas with favorable momentum.
The Global markets are closely linked- and the US markets still hold the best return and overall "Safety" - Should the US markets fail to lead, will the foreign markets then dominate? Doubtful without the US leadership- But some allocation to the global markets is wise, as the net valuations are much less expensive-

How one chooses to allocate what % of their investments is a personal choice- If Stops are not used- one has absolutely no control over how deep a decline one will stay invested in- Take MO for example- compare owning the one dividend stock against the Dividend aristocrats- which spreads out the Risk with dozens of other well established dividend payers- My personal view is that any individual holding is very speculative- and should be only a small % of one's portfolio-

Anyways- I was whipsawed- stopped out- of most of my positions this week on the Monday sell-off- and took a sizable net loss- -3% overall from where I was the week prior- and so- time to consider How and when to rebuild-

[sd]

1-28-20 Note-
Stopped out widely- only a few positions remain after the Monday sell-off The tight stop largely locked in gains and some recent positions as losers- but was also whipsawed by today's higher recovery by the broad indexes- Typically, I would say that I should just reenter- but we are in the beginning of earnings- AAPL had a great quarter- but is considered very highly priced at 24x - and TSLA will be reporting- but I don't own either- but they will tend to set the tone for the markets this week and the "Risk" appetite- I had expected a larger multi-day pullback-and I think AAPL has kept the ship afloat -
I find myself in the position of the typical market timer- pausing to reenter based on the hesitation that the waters may not be "Safe" -
There is something to be said by having the security of a broad trending market allowing one to take a larger position feeling confident that the momentum was in your favor- Not so trusting this week-