SD- 2021- ACTIVE MANAGEMENT FOR GREATER SUCCESS IN 2021

[sd]

Understanding the business cycle- and sector rotation-
Ray Dalio's (Bridgewater CEO) explanation -30 min youtube video-
www.youtube.com/watch?v=PHe0bXAIuk0

From Stockcharts- The business cycle/sector rotations- Worth understanding - give it a read and ask yourself where are we now in the cycle? It's somewhat difficult to determine- because the Delta varient cewrtainly continues to impact any normal recovery, with supply issues and labor shortages contributing to a delay in a full reopening-
school.stockcharts.com/doku.php?id=market_analysis:sector_rotation_analysis
We seem to be in a stage 4 -possibly entering a stage 5- where staples, commodities and materials may become leading areas.
DUH- They are the leading group SD! NO MAY about it!
This eventually signifies we may be nearing the peak in the business cycle as higher prices, inflation, and an economy that has not returned to it's growth potential due to delta- The results of the 3rd quarter business and the outlook reported by companies for the 4th quarter and beyond will set the tone for the ongoing recovery- Also, the Fed Economic policy- when will they announce the tapering of Fed backed buying.? Peaks in housing prices - will likely see a stall in the housing construction- as interest rates rise
We are seeing a surge in commodities pricing , as well as in the energy sector- the article suggests that this may be a prelude to the market cycle topping- Potentially this is still some time away- with the Fed at the Tiller - we could see an extended period of a market that sees the economy and labor return to a new normal participation.

"Stage 4 marks a period of full expansion. Both stocks and commodities are rising, but bonds turn lower because the expansion increases inflationary pressures. To combat this, interest rates start to move higher.

Stage 5 marks a peak in economic growth and the stock market. Even though the expansion continues, the economy grows at a slower pace because rising interest rates and rising commodity prices take their toll. Stocks anticipate a contraction phase by peaking before the expansion actually ends. Commodities remain strong and peak after stocks."

By taking notice of what is leading the markets over the recent and longer term, gives us an idea of what is favored by the current and direction of the market's momentum-
The market performance graphs I post are from the Finviz.com- group page - As human beings -and traders/investors- we become "anchored" to what we buy -or buy and hold- This is a normal- attachment that most of us do to one extent or another- that may not be beneficial if we don't know where what we hold is during the market cycles- Our individual bias in what we have selected may run afoul of the shifts out of favor during the market cycles- I read in Edelman's book that 49% of all stocks held over a 10 year period underperform the market....Don't know if that statistic holds true for the past 5 years since the book was published- but it likely is close.
Who would have expected Coal and oil/energy stocks to be market leaders a year ago? With the Biden administration stopping the pipeline expansion and putting restrictions on drilling and fracking as part of the ESG movement, it now becomes an issue of restricted supply and greater demand- causing rising prices -and ultimately inflation for the consumer.

The Finviz.com Group page- Performance graphs - It would be worthwhile to print these out-once a week perhaps- to note any meaningful shifts-but just give this a look periodically to see if you have any investments in what is leading- or are now lagging.
finviz.com/groups.ashx

[sd]

Tom Bowley sits in for David Keller on The Final Bar
www.youtube.com/watch?v=F96HqQ7mfWc

JCParets- His interpretation- of the past month- expectation that rising rates = favoring cyclicals, Energy, Financials, potentially materials and even industrials. He provides refreshing commentary!
www.youtube.com/watch?v=cZRf_hVORwM

Taking a relative performance over the past 30 days in some of the big energy names- relative to the S&P 500

[sd]

10-11-21 Futures Flat-Nas red- Energy up

[sd]

Energy pulling back, Futures flat-Nas up -
Been working yesterday & today to compare 5 year performance of our present advisor with EQIS funds.
Returns vs market BETA (volatility)

[sd]

For 2 days i have been reviewing  an account that Lolo and i  initiated  5 .5 years ago with a "professional"  money manager - and gave them some of our IRA  funds to manage-  On their advisement- a portion was placed into a  "safe' Annuity, and a portion was placed into an actively managed  fund.   The initial input was set to be be age appropriate- which meant it was designed to be a  very conservative portfolio  for myself- and slightly more  market aggressive for LOLO-  7 years younger than I .  Over the course of those 5 years, there have been 2 eras  of market's declining- Over the 5 years  the market has gained 124%My managed account  under their guidance gained  but  24%-  but also had a very low drop during periods of volatility when in 2018  the market dipped -20%  and again in 2020 when the markets dropped  -35%.LOLO- as the grandkids refer to her- saw her account gain +48%  with approx half of the downside  during market sell-offs-    This Spring i expressed to the manager that I wanted a greater exposure to the upside - also realizing that this would result in a wider volatility and greater downside  potential.   That has resulted in a +5% gain in the past 6 months-
We meet with that adviser this Thursday-  He is essentially a middleman broker- He charges us a .70% fee in order to access a company -Granted, my account and my spouses are  relatively small, and the .70 fee does not amount to much for them. EQIS - that constructs portfolios using institutional funds , and does not use  individual stocks or ETFs.   The EQIS management fee is 1% - so the combined fees are 1.70 -   In addition, as i research these institutional fund s in greater depth- find they have substantially higher  expense ratios  than ETFs, and it is very difficult to find complete historical informan on the funds' performance.  In fact, i think there may be  reimbursements from the funds high expense ratio back to the EQIS management company-  None of which is recorded .  This would be a conflict of interest a true Fiduciary adviser would not be permitted to do-  I have directly asked my local adviser if the EQIS  funds get any kind of such reimbursement for delivering clients accounts to these other companies-   I expect they will deny this being the case,  but it makes  perfect sense in what may transpire in the institutional marketplace- One hand  massages the other.        It is similar to other funds- Like Robinhood- who get kickbacks for the payments of the orderflow from the clients.The Clients benefit by having all-time low  or no commissions at all.  The markets are becoming more transparent -  much like the Wizard of OZ as the curtain is pulled back to reveal the "operator"  controlling the stage setting.
By interviewing  an EDELMAN Financial Engines representative lately ,  We have decided to transfer a substantial  % of our presently managed IRA and Roth accounts into their custody and management.  They have set up an ETF strategy with diverse funds that   will also be rebalanced automatically if one area goes significantly beyond it's allocation % .       Personally, this is a major decision- It also takes the weight off my shoulders  to  ensure that the funds will be there in the future when needed. I expect lower market returns in the future , higher inflation, and possibly even a pullback  of -10% deeper than where we are today.I will retain a reduced position in both the Van IRA and Van Roth from  which I will continue to engage the markets- Those combined funds  I still control will be approx 60k across 3 accounts.  2 Roths and 1 IRA.  Should settle out with transfers over the next week. 
As i meet with the original account adviser  this week, I have informed him I will be hiring a new adviser with the ETF approach,  Both advisers charge approx the same  1.70  vs 1.75-  But the Edelman uses relatively low cost ETFs while the Other uses high cost institutional fund.s  that aqre very difficult to find  performance results on-  Some of the funds they employ  are low on the morningstar ratings as well .   I am giving this new Edelman  adviser   a portion of my Roth and IRA  principal as well as gains-      This also diversifies the account between  myself, my spouse, and 2 advisers with  2 different market approaches- I allowed the 1st adviser 5 years before i would make a judgement call-   As i take on a 2nd adviser,  I now will be able to compare performances  between both strategies - versus selecting between one or the other-   i think a 1 year  performance review  will prove instructive, while a 3 year performance should be  conclusive and perhaps  indicate that one manager significantly out performs the other-  My bet is the low cost ETF  approach will win .  We'll SEE. 

[sd]

10-13-21 Futures up mildly- Financials start reporting today...AAPL cuts I phone production due to chip shortage.
Captain KIRK- William Shatner- age 90 going into Space!
I had several stops hit yesterday- In this chop I'm not giving profits a chance to become losers. The swing lows made last week followed by moves higher certainly looked like a bullish return to a potential uptrend- but last week's high was a lower high -and so watching where SPY goes -a lot of stocks will follow.
The downtrend line as well as last weeks $426 lower low sets the bar for establishing the market future direction.

The 1 hour chart is instructive- Notice how often the red -sell volume bars have been larger than the green buy volume bars the past 3 days.


Bucking the Trend- I belatedly bought the breakout last week in F- and LOLO had the ideal entry in September!
My entry followed a breakout of the sideways range established the prior days- That range had a price drop lower 10-6
with a recovery into the afternoon . The subsequent price action stayed positive, and didn't pullback down into the top of the prior range- This positive F price movement is despite the SPY acting weakly and pulling back.
I'm setting expectations that the trade will continue to behave - even if SPY does not-
I'm also setting a stop predicated on the premise that this trade will continue to have a series of ups, base sideways a bit, and further up moves- I'm trailing a stop based on price ranges trending higher- This also reduces my potential loss
to be a minimal $.40 from my entry- 10-12 - Solidly green volume day bodes well- but I'd like to see the MACD more positive.


As we enter 3rd quarter earnings, the guidance for retail and perhaps business will be all about the supply chain issues, and labor/manpower issues- The GDP forecast for productivity has been reduced- as Delta continues to impact areas and the labor report shows sub par results ....Rising rates are good for financials- reportedly- and so I took a position in XLF earlier-- It "broke out higher" above the recent range highs recently, but has stalled and is retesting the upper end of the prior range. I'm giving this some room for volatility- and see how it respons to earnings this week-


This popped up on my screen- Huge % increase in SS payments will help reduce the impact on retirees.




ADDED to XLE,PXE - OIL/Energy on the close & price pullback.

[sd]

10-14-21- Markets big surge higher! Including taking energy along with it-Everything up except F.
I wasn't able to watch markets today, had a meeting with an Adviser to discuss the account performance we've had in the 2 small accounts he manages for us. The major benefit of having an adviser is that you essentially don't have to monitor the accounts they manage on a frequent basis- And they keep you invested, with periodic rebalancing if the accounts stray too far from the design parameters- If the bond component rises and stocks decline, they sell off some of the bonds to buy more stocks at a discount.
The advantage of using an impartial Fiduciary investment adviser: -They do not react to market swings aside from applying periodic rebalancing algorythmns as things get out of balance-

Interviewing with my original adviser today of 5 years- I showed him my equity curve and personal performace- as well as the intent to invest a portion of assets with Edelman- and the projected portfolio holdings and allocations-
He is going to make changes to my allocations to achieve more volatility and potentially see more growth- He uses institutional funds and claims that the portfolio is not charged the high expense fees that these institutional funds levy on many individuals- I have spent a few days trying to find out information on all of these institutional funds- and only about 50% have published performance records and transparent and high fees. I came away from the meeting with the belief that my adviser is both sincere and waaay beyond my comprehension of how his strategy is designed - He was able to show me that my relative underperformance compared to my spouse was largely of my own doing- by selecting to modify his approach years ago.....Go figure- I ultimately came away feeling my Adviser has my best interests in mind, and the underperformance complaint is my own fault for something I may have requested years ago in the way the portfolio and annuity was managed? Say that again- and take ownership Chin Up!
I also discussed with him that I was planning to also employ a different- adviser - Edelman- and he proposed that Edelman would be charging me much more than his costs of institutional ownership of individual stocks. And his accounting measures he covered - without paying for the higher individual expense ratios he claimed Eqis does not pay - appeared to be be less of a cost-
That said- he also pointed out that his portion of assets were never designed to outperform any narrow benchmark- like the S&P-instead could be compared to a world index.
Additional recommendations he suggested was to transfer IRA assets into Roth accounts and pay the fees now in order to have a decades long portfolio designed to never be held liable to taxes in the future-
To be a real tactical consideration in the future.
I made that suggestion to my new Edelman adviser- who responded by pointing out that the Biden administration declares that the only taxable gains increase will affect those making significant income -+400k -
That certainly is not my concerns-unfortunately well out of my league.
However, rolling assets out of an IRA into a ROTH -at least over time- does make sense- Particularly if limited to the reduced and still stable tax rates- and up to the level where it almost pushes assets into a higher tax bracket-
Projected Tax rates for 2022:https://www.cpapracticeadvisor.com/tax-compliance/news/21239802/2022-estimated-income-tax-rates-and-tables

[sd]

Exploring the potential of seniors with a conventional IRA,and lower annual income -perhaps retired- to take advantage of rolling out portions of the existing IRA annually into a ROTH.
for the benefit of reciving TAX FREE gains in the future-




The IRS requires the % of RMD withdrawals to gradually increase each year once one reaches age 72.
Your average Life Expectancy - But you might live much longer!


It's critical to take out and pay tax on the right amount of RMDs you are required to withdraw- If you fail to take the full amount required out , the government will levy a 50% penalty on top of the tax!
I recommend checking with a professional concerning one's RMDs- but my limited understanding is that all investments one has that have been in tax withheld accounts- like a conventional IRA (Not a Roth) are mandatory to start taking withdrawals by age 72-
According to this Uniform Lifetime table- at age 72 , one divides their total IRA withholdings by 25.6. and that cash withdrawal amount is added to one's annual income-
If one has a $100,000.00 IRA- / 25.6 = $3,907.00 needs to be taken out- and depending on the income one has, will be taxed at the present tax rate.

If one has $500,000.00 = /25.6 = $19,532.00 needs to be with drawn , and added to one's total annual income-
If one has a (congrats!) $1,000,000.00 /25.6 = $39,063.00 is withdrawn and added to one's annual other income sources.


Since I'm turning 72 next year, I'll have to take RMDs-on the combined accounts- This year, our only other present income is Social Security, and well below the 22% tax rate that comes at income above $83,500.00- It seems perfectly logical to take out the RMDs as required- and potentially also take out the remaining amount up to the $83,500 level - by rolling that amount over into a ROTH and keep it working by being invested in a Roth for future tax free gains at a very low tax rate.
Most retirees will live on reduced incomes- The vast majority of us will not see income IN retirement above that $83K level- but it might prove worth while to talk with a professional about the benefits of paying the 12% tax by making partial rollovers annually into a Roth, and eliminating the "What if" of future tax changes getting more punitive. ALSO- I think there are some distinct advantages of passing on assets in a ROTH to one's spouse or heirs.
Again- that would be a discussion with a professional adviser that I am going to explore further.

[sd]

10-15-21 Futures again higher- Markets rally! Financials reporting large profits! XLF benefitting-
This is a multi sector rally - I added a position back into the Equal weight tech ETF QQEW-
I've trimmed positions in the accounts and have reached the cash position that I will need to rollover into an Edelman IRA and Edelman Roth
Fully invested with my reduced accounts that I will retain. except for a recent 2k freed cash to clear in IB
BUYING TROW! Breaking the downtrend-


I actually bought TROW in both the IB account and Van account- for a total of 30 shares- I will either have to sell shares in another position to get the necessary free cash for an account rollover-or allow a position holding to be rolled over with cash

[sd]

End of Week summary- I've put the majority of the account into cash this week prior to rolling out funds from my Vanguard account into the Edelman account.
The combined Van IRA, Roth made small gains this week on the minimal holdings- Energy, commodities, Financialss. $240,616.00
I'm rolling OUT $195K into the Edelman account- 150k into an Edelman IRA and 45K into an Edelman Roth-
leaving approx $45 K in both Van accounts that I will still actively manage.
The IB account shed 10% over the chop in the past 7 months- Down to 20K
My Net IRA/Roth under my control will be $ 65K after the rollover.


Ultimately, I feel this is a prudent decision to have an Edelman Fiduciary Firm to manage the majority of the account-
I have found that while I have had little in terms of sustaining drawdowns, I also have Net underperformed the markets over the full cyle of ups and downs -particularly with markets (SPY) presently up over 120% the past 4 years.
I'll reflect on some of the pros and cons of my trying to time the markets and discretionary trade decisions and a lack of a real defined portfolio to manage- later in this thread.
Edelman suggested
It will hold 16 diverse ETFs that are automatically rebalanced based on price accumulation/decline over the market cycle-
Over the longer term, this approach has performed well with reduced volatility on downside turns and a good portion of the upside- when the markets recover.
I cannot take a sit and hold it for the long term approach in funds under my management- I expect I will continue to
apply stop-losses in my positions, and seek to rotate with the market's rotation.

But I can allow those funds to be managed by an impartial but discipled Fiduciary firm like Edelman- I won't be looking at the Edelman account balances daily though-!

The noteable feature of the Edelman ETF model approach is it's use of LOW COST ETFs. also providing diverse global investments. In investing , Costs and FEEs matter- The majority of the ETFs have expense ratios ranging from $.04 - $$.06 with a few having higher ER s of BOND FUND $.30 TIBDX; and a small portion allocated to "New & exponential Technologies "$.20 KOMP,

The Edelman ROTH will have many of the same ETFs, but the % weightings may be aligned to be more aggressive towards the stock exposure- potentially allowing for a higher rate of growth with more volatility to be expected.

The many advantages of a ROTH should be maximised -it's the ideal account for trading and investing- No capitol gains- Ever! After getting the % the employer will match, Max out the Roth if possible- With potentially decades ahead for the government to try to find ways to increase taxes- having those assets growing tax free in a Roth will be protected.

I will also explore annually taking out IRA contributions- RMDs and then roll out some at the low 12% tax rate to put into the Roth.

[sd]

"THE FINAL BAR"- David Keller sums up the week-https://www.youtube.com/watch?v=F2bsQYbABGU
I recommend giving him a listen - for a wider perspective, what is in rotation, etc. He also thinks this market needs to exceed the prior highs to believe that one should also be back in 100% - 20 minutes in he explains the thinking of having a reduced position, and then adding into it as a Trend follower.


Think the Markets over valued? Overdue for a more substantial correction?-When & Why might that occur as we've just recapturing the recent sell-off?
Meb Faber -Cambria funds- (I hold SYLD- a Cambria fund.)
Discusses how to consider using a Hedged fund to offset the potential for a serious future market correction -
Similar to owning an insurance policy-
Faber -prolific author- many white papers- Book- "The IVY Portfolio"
www.amazon.com/Ivy-Portfolio-Invest-Endowments-Markets-ebook/dp/B001ULD5BY/ref=sr_1_1?dchild=1&keywords=the+ivy+portfolio&qid=1634479060&sr=8-1
introduces one to the benefit of portfolio management & the institutional approach to diversified investing\, and rebalancing.

Consider this video as he explains using a Hedged fund that also includes Bonds + an Options allocation with laddered PUTS on the market-
As an "Insurance" consideration- it has a cost- and acts inversely to the bull market-It goes up when the market goes down.
And will underperform when the markets are rising.
www.youtube.com/watch?v=Q6BvXrQ7tzw




A friend sent me an e-mail questioning the "WHYs" of my decision to turn over a good portion of assets I personally manage to a firm (Edelman) that will have a manager's cost -1.75%-associated with managing the portfolio-
I have seen that I do not have the psychological stomach or stock/ETF conviction to personally hold through markets rotating up/ down.
Without getting substantially wider dips down, shallow -5% declines become whipsaws, leading to not getting the market's return +22% YTD I think. I only succeed when we have a more substantial correction (2018 mkt -20%_ 2020 MKT -35% ) but over the longer term, the market has managed to resume the uptrend. My approach "succeeds" by getting out of stocks/etfs when they are in early stages in a decline. However, while my downside Risk is well reduced, over the longer term, as long as the markets continue to resume an uptrend eventually, The proper allocation model clearly outperforms me, albeit with greater volatility.
I believe we are likely seeing a market at a peak and that the future earnings- in the 2022 quarter will reflect more disappoints due to manpower issues, supply shortage impacts, inflation etc. So that sets up my "Bias" as seeing the Glass is 1/2 empty vs 1/2 full. That Bias will impact my trading decions and behaviors- I will "see" what aspects I focus on, and my trading will reflect the results of that bias. I am not impartial- I am prone to react -adverse to taking a loss. This bias handicaps my results overall.

Risk and Responsibility- Having the responsibility to manage the larger portion of what essentially is the sum of several decades of investing through an employer's sponsored account... That's a substantial responsibility to be under my discretionary decision making, or to be influenced by a somewhat skittish and negative reaction to the market's volatility. Had I seen both upside outperformance consistently, along with a reduced downside Risk- over the longer term of a market cycle- That would be acceptable to keep the account fully under my management- However, I have to recognise that I did not get the long term outperformance I was expecting- and I recognize that my bias thus interferes with my performance- particularly when compared to an unemotional, unbiased and scientific approach investing model.
(Yes , I easily outperformed the CF Adviser approach, both on gains, reduced volatility as seen on the equity curve)
That CF Adviser is reallocating my portfolio to achieve greater upside- and i will compare his net results over the next 1-2 years - both as to the potential to capture a portion of the markets upside relative to keeping a portion of gains during the downside.

The EDELMAN approach:
www.amazon.com/s?k=rescue+your+money+by+ric+edelman&crid=3HF11HBVZTS7X&ref=nb_sb_ss_ts-doa-p_8_12
Essentially reduces market Risk by staying fully invested through market cycles, but reduces the volatility by rebalancing the account holdings during periods of excesss movements -both to the upside and to the downside-
As stock/ETF holdings surge in value, the bond/Cash % will typically decline relative to the net value in the portfolio.
The automatic rebalancing is done automatically- So a portion of the Stock based ETF will be trimmed to buy a proportionate amount of the bond/cash component. (Cash 2%) Similarly, during periods of declines- As the bond component likely increases in value as the stock component declines, portions of the rising bonds will be sold and the assets will be used to buy the stocks that are now lower priced (Dollar cost averaging) .

You get to accumulate retirement savings over many years of work- To lose a good portion of those important assets - to inflation- or to making a panic decision/ or to fail to see the "Big Picture" - all potentially jeapordize the long term viability of the account lasting for those 10, 20, or even 30 years that one may potentially need to last through decades of retirement without any other sources of income except for SS. (SS gets bashed as an "Entitlement" but it is something we paid into our working lives-) Will it be there in the future or will it go bankrupt as some project without being rescued? Better plan that SS is not your only source of retirement income!

What is Plan B? The "What-IF?" scenario if things do not go forward as one expects?

With adding a 2nd adviser- Edelman- with a different market approach from the 1st adviser- C.F., I will have diversified my holdings, and also have diversified approaches. Both Advisers claim to be 'Fiduciary" -
Both Advisers will control approxomately the same % of present assets- 40%+ each
CF takes a " bucket" approach- With a portion of assets placed in a $0 Risk- Low gain Annuity- with a promise of monthly payout for a lifetime. The other portion is holding a diverse basket of stocks through a group of institutional funds.
CF with the annuity constitutes the slower growth and "safer" portion of the account.
EDELMAN - 40% + uses a 16 fund basket of ETFs that include Growth funds, some bond funds, and international Growth-
Edelman will be a higher Risk- Higher Growth portion of the portfolio

Both CF and Edelman use rebalancing as their method of Risk control and keeping the portfolio in balance.
The costs of the rebalancing are included in the expense ratio paid to each Adviser.
When evaluating how much RISK one has - calculate a what-if scenario if the market was to crash and lose 50% in market value. How would one's holdings perform? Would one's account decline more than the market- or less? BETA?
Here is how i judge the Risk potential for market volatility .

Annuity- Guaranteed long term income source -slow growth (similar to a bond component) = 24% Guaranteed -Inflation Risk
Eqis funds- Age appropriate (reduced market Risk) -lesser downside Risk (-.5% -.7%) =18% .75% Market Risk
Edelman-IRA Diversified Stock/Bond ETFs - Rebalanced incrementally =27% .85% Market Risk
Edelman ROTH Higher volatility % Stock/Bond ETF Higher Volatility/higher reward =15% 1.10% Market Risk.
SD & LOLO actively managed Roth accounts - Discretionary self managed account =16% .75% Market Risk

Annuity- Has 0 market Risk of loss- will not lose in a market decline- Trade off- Very little growth in the upside.
EQIS funds- has a past limited performance upside of .5, but has seen lesser volatility as well .
Edelman IRA- Less than market Risk due to the bond component and active rebalancing
Edelman Roth- Will intentionally hold a larger % in growth, few bonds. Greater volatility
SD & LOLO- Will be adapting & modifying their approach - but still retain a stop-loss approach.

If one owns a portfolio of stocks, it may be useful to understand how one's holdings compare in volatility to the S&P 500.
This is the BETA- a measurement of 1.00 is essentially the same as the S&P 500.
A measurement below 1.00 ; .83 is lesser volatility. 1.22 is greater volatility.
The last Column in the Finviz - AAPL gives AAPL a 1.22 BETA. AAPL YTD return is only 1/2 of SPY- with greater volatility.
finviz.com/quote.ashx?t=aapl&ty=c&ta=1&p=d









----

[sd]

10-18-21 Futures modestly in the RED
Disney downgraded affecting both the Dow & S&P
With the futures in the RED- will the market still find strength in the Energy and Financials that have shown continued strength over the past weeks? With earnings coming in strong for some Financials, and Energy a leading sector- will they continue to dominate the relative performance this week?

Present portfolio : Back on 9-15 I started to shift assets to be more aligned with what is the outperforming sectors-
This is an attempt to be more aware and more in alignment with the market rotations-
This is just in recognition that the sector cycles can shift relatively quickly away from one area, and into another-But it's worth while to find the outperforming sectors and shift to overweight or into them- That's where i'm heading- with my present management trying to be "tactical" So that initial shift was into Energy, commodities- and recently Financials -are all profitable--
As the markets settle out after 10 am....
Energy is UP am
I just SOLD the majority of SYLD to get the Freed cash level for the upcoming account transfer To Edelman-
These should remain my present positions post transfer.




IB : COMT,DVN,PDBC,PXE,RRC,TROW,XLE (TROW just added last week as a financial )

In the Van accounts- Since the investing shift starting Sept 15 and swinging into the energy/commodity space: Present net results over the past 30 days is a relatively modest , but net positive gain of 4.8% , while SPY is essentially flat over that same period, with some real volatility dips.
Viewing the SPY's volatility over the past 30 days - Today it is back at the 9-15 price level- A volatile month with drops of 4 & 5 %-


Now compare with the ENERGY sector performance :Less Volatilty relative to SPY- and Profitable!xle


IN TERMS OF THE RELATIVE PERFORMANCE SINCE 9-15



since THE XLE is an ETF, it holds 23 Large Cp Energy sector companies.
Note that in the article -link below, in the PEER comparison, the Vanguard Energy Fund- has a lower expense ratio, and has 96 holdings, and has outperformed XLE by 10% YTD-
www.etf.com/XLE#overview

As I swung into the Energy and commodity areas, I took both the ETF approach, and different positions- particularly in the Commodity investments- I also looked to find some of the individual stocks that are among the leaders to make a single stock investment in- but also realizing that the single stock position is inherently a higher RISK/higher potential Reward.
My investment in DVN has delivered outsized gains relative to the position size.

How long will the Energy trade continue it's outperformance? Impossible to know for sure, but reduced supply, greater ESG restrictions, and higher demand for energy- OIL, NAT GAS, even Uranium - may be part of a sustained longer term trend -

While I have been posting the Fiviz Groups performance graphs,
Stockcharts Stock Industry Groups ETFs and the SCTR ratings provide a good resource to #1- identify those sectors that are presently leading, and by seeing a rise or fall in the SCTR scores, determine that the companies within that ETF have rising or falling momentum-Various Firms- and market Fund advisers do similar momentum screens- Like Tom Bowley of Earnings Beat.
This is something I should do on a weekly basis to get the bigger picture trends- or rotations that are occurring. I've been too lazy in the past to bother with this kind of extra homework,
By drilling down to the individual stocks within that sector, one can find the leadership company names, and potentially the real leaders .Those that show up consistently over the 1 week, 1 month,3 month time frames will have the higher SCTR scores. Stock groups gaining in SCTR rankings will identify the market's potentially rotating into that area.
Conversely, a Decline in the Weekly or month SCTR rating may be a warning that the market rotation is pulling $$$ out of that area.
Chart is today's intraday sorted by the highest SCTR ratings - partial chart



I'll only take partial snapshots of 1 Week;
Some of these funds with similar exposures will have overlapping and same individual stock holdings-
What do I do with all of that information?
Over the past week, - Do the best performers continue- Do better gains over a week become a Trending outperformer?
Compare the funds that have very low SCTR scores- yet had relatively good % gains- Dead cat bounce - or the Next Best Thing?
In this 1 WEEK chart - Silver-SIL has a 3.8 SCTR score and had gained 7.56%!
Solar, Wind, Cyber- all up on the week.
Gold miners -very low SCTR 4.6; 5.8 (oversold?) Up over +6%
Worst performers- Airlines- 6% , Biotech, Pharma


Energy positions ended flat on the day- "Inside Days" -Going higher initially, but Closing lower or near the open.
Tightened up stops a bit in the event Energy positions gets pushed lower- Tech goes higher-
One days flat price action does not warrant an over reaction on my part-

[sd]

10-19-21 Futures Higher on all indexes, despite the 1.60 10 year yield
Housing permits down sharply! -7.7% vs 3.4% est. Yesterday , Zillow announced a halt to it's home buying- Likely signals we've reached a peak in the momentum demand in the housing market.

1st Crypto ETF opens for trading today- with Crypto at an all time high!


Viewed an Edelman podcast yesterday. Interesting projections about the future, the nature of work, your potential to live a lot longer than you may expect-and taxes-If interested inviewing- :Some 50% of present jobs will disappear over the next 15 years- The worker of the future- will have to be more adaptable to make job shifts, ongoing career education, and careful about what you spend big money to get an education/degree in-! Student debt is the next big personal crisis looming already in America-


event.on24.com/eventRegistration/EventLobbyServletV2?target=reg20V2.jsp&eventid=3374196&sessionid=1&key=52F190C11FF765BF3B734EEE6601B02F&groupId=2831525&partnerref=sharedfromclient&sourcepage=register

Busy day- Won't get to watch the markets much- Healthy!

[sd]

10-20-21 Futures flat premarket- NFLX reported 4 M new subscribers- but is also Down premarket-
How earnings are interpreted and the future guidance will set the tone for sectors- Disney also has analysts concerned-and is now at the bottom of it's sideways range- Does it drop down to the $160 level? (Not a position).
Will Tech continue to see a recovery into this earnings season?
FB has seen 2 days of an upmove after getting broiled at it's congress investigation.
Rotation into Tech has taken the 1 week leadership-!
Chart below showed the rotation/results through Tuesday 10-19


I'm seeing weakness as several of my energy positions are dropping lower, stops being hit- DVN today-
The performance chart this 11 am reflects where the leadership is moving, and what is weakening- Indexes are trying for new highs. Note how Tech -is not leading today, and has made a slight reduction in today's present 1 week performance graph shown below. Financials are also moving up on the weekly performance ladder, and defensive sectors are actually today's leaders.



Stockcharts Sector Summary ETFs reflect where the strength is today


BRKB - can be viewed as a conservative conglomerate of sorts- Berkshire Hathaway- Warren Buffet and Charley Munger.
It is moving up within the cuup formation, range breakout today, and potentially would be thought to be a good Buy here as a "safe" investment-as it also owns financials, utilities, and "value" . (I do Not intend to take a position)

Over the past 4 years BRK/B -(red line) has not been a barn burner as an investment- Note that it also dropped significantly % wise in the 2020 Covid sell-off - from it's 22% highs it fell over -30% - as Spy fell only slightly more -35%.
However, is it now becoming a better investment?


But, as we have seen in 2021 , the market rotation into more 'value' and out of growth stocks (tech) , made BRKB the relative outperformer if one invested in Jan 2021. - The question is, will BRK/B or the value type of investments-small caps also perhaps- become the next areas favored by the market rotations as we come out of earnings in October?
Let's view the recent chart- including small caps IWM over the prior 6 weeks-
Both small caps and BRK/B were less volatile than SPY (Blue line) or Tech- Green line.


Viewing the recent market swings over the past 2 weeks:after that September decline, the Perf chart shows that large cap Tech has come from behind to take the relative lead- but BRKB got a relatively sharp upmove in early October, pulled back and based, and today is making a move out of the recent base-

Today's positive higher move enters the overhead supply zone- Where Buyers in August got trapped as price fell with the markets in September- Some opf those prior Buyers will be willing sellers anxious to get their money back - and perhaps put it elsewheres-- How long it takes for BRK/B to push above the $290 level will be the 1st question- but this provides a potential low RISK early entry - one could apply the higher Swing low $275.55 as a -4% stop-loss into a quality value name.LOLO had exactly only enough free cash to Buy 1 share - so we'll use her entry $287.00 , stop $280.00 just to track this.



Listening to Paul Tudor Jones, David Einhorn - both expressing valid concerns about Inflation and the ultimate- eventual market reaction going to the downside. David Burry -"the Big Short" market a parabola. But he cannot say "when".
www.youtube.com/watch?v=W9KTUDXzx5E

As i think back in recent years-about the bear pundits that come out and make negative remarks-about the markets- and the market chooses to react by putting in a drop - only to soon recover- Will this time be different? Will the markets really tank when the Fed announces it's going to pull back? The steady downtrend over 4 months in 2018 had a snapback fast rally Dec 24 of that year- DOW and SPY making all-time highs today- so the recent lows provide a critical line in the sand to not be broken lower on any future pullback.

Tech closed the day flat- S&P, Dow, and Russel all up .3 to .6%
The day closed out still seeking the "safer" sectors.
All of my positions closed in the green,even the Tech position QQEW , with F the outstanding Close higher- -+3.73%
Challenging the highs made back in June!
Real estate followed bu Utilities and healthcare- the new rotation?

[sd]

LEAP OF FAITH !

I had to sell off a large position in SYLD in order to meet the -in cash needed for the Transfer OUT to an IRA rollover managed by EdelmanFinancial Engines .($150k) I am rolling out over 91% of the IRA to Edelman to manage in an IRA rollover. (No tax penaty)leaves approx 24.4 k
I sold off positions in XLE and FTGC in the Roth -($45K), that Edelman will also manage as a Roth Rollover. That will leave
approx $21.67k in the Van Roth-
20.17 k in the IB Roth.
Final combined total of funds in the 3 accounts for self management-Approx 66K-+/-

These 3 small accounts represent 2 individual separate ROTH accounts (Tax exempt) & 1 Conventional IRA (Taxable)
The IRA and the 1 Roth are both held in Vanguard. The other Roth is held in an IB account.
My intent this year will be to transfer the IRA through a rollover into the Van Roth- and because my annual income will be Well below the 80K tax level, I will only pay 12% in taxes on those dollars- -
Potentially, I will then do the same in 2022,2023,2024 etc and roll those assets into a ROTH - ideally increasing the ROTH account to grow tax free and and exempt from RMD withdrawals /value calculations .
"Invisible and out of the hands" of the Tax man.



Edelman uses Schwab as the broker-dealer -
Once the accounts are funded and the allocations started, I will list the ETFs here-
I asked my Adviser to split the investments purchases- so this month 1/3, next month 1/3 ; and the final 3rd will be invested in December.
This will potentially be investing at different levels in price- and potentially could see a pullback in the other months in order to dollar cost average in