How Much Is Enough?

Ulli Uncategorized Contact

I’ve received a lot of reader comments and questions during these uncertain times with one reader asking: “Can you not post more frequently during these turbulent times giving your views on what the market is doing and where it is headed?”

Because you ask that question, I believe that there a few things wrong with your approach to investing. I already post once a day, just about 365 times a year. For the strict purpose of following my trend tracking methodology, that is way more than necessary. A commentary once a week and somewhat more often as we approach potential buy and sell signals, would be totally sufficient.

The remainder of my posts are dealing with items of interest and investment philosophy as well as “how to” subjects. My objective is not to regurgitate daily financial news, which you can read anytime at your favorite web site. The goal is to comment only on those events that have a direct impact on our investment plans. Everything else represents Wall Street noise and is immaterial.

As you know, I don’t believe in predictions, and I have no idea where the markets will be at next week, next month or how long the current bear market will last.

Based on your question, I have to assume that you are drowning in information overload and may even be getting some enjoyment out of it. You are probably putting too much weight on daily useless information, and I’m guessing that you are spending considerable time digesting it.

What the market does throughout the day, or most of the time even during the week, is pretty inconsequential to our plan unless we are approaching major inflection points. You need to simplify your approach by only focusing on the events (major changes in trend direction) that matter.

Here’s how I do it. Right now, both Trend Tracking Indexes (TTIs) are in bear market territory and the recommended position is to be on the sidelines in money market. As I have pointed out repeatedly, we are holding some small positions in gold, Swiss Francs and a mutual fund hedge. Our stop loss points are being tracked daily, but until the markets make a major and sustained move to one side or the other, there is not much else we can do.

Since I don’t control market behavior, nor do I have any inside knowledge as to what will be happening next, I have to wait for the trend to establish itself before I can make my next decision. I suggest you follow a similar pattern, in order to get away from the apparent need to be constantly bombarded with market information.

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