Last Friday, I deployed 10% of my portfolio into the S&P 500 spider exchange traded fund. Today, I will be doing more buying. I'm encouraged by the reduced volatility that we have seen at the end of the week. In addition it would seem plausible that the market has already priced in a long and deep recession. I'm reducing my cash to about 30% with today's buying. Here is what I added to the portfolio today: Utility ETF (XLU), Semiconductor Fund (XSD), Preferred stock fund (PFF), Materials ETF (XLB), Oil Long ETF (DIG) and Global Infrastructure (IGF). I opened positions with $50,000 each. I also added $25,000 to the existing positions - IAT, IYK, ITB, IYT, IGM.

The model portfolio is down 1.5% at the moment. November has typically been a strong month. If so, I still have a chance to finish the year in positive territory. The election, no matter the winner, should be a good catalyst as it removes one big uncertainty.

Jamie Dlugosch
The Rational Investor

Comments: View Comments |  Friday October 31, 2008  |  Stocks: DIG, IGF, PFF, XLB, XLU, XSD,

Fasten your seat belts. The market looks like she is crashing today as futures traded limit down this morning. World markets are all down some 10% and the U.S. looks to follow suit. Where she stops is anyone's guess. I have 75% of my portfolio in cash and will use some of it today to buy. I want to see where the bottom is first. It may be early it may be late. If it is late I will buy near the close. What will I buy and how much will I buy? Good question. I'll probably treat this as a trading opportunity. As such I'll use 10-20% of my porftfolio and use to buy an exchange traded index fund of some sort. I'll report back after I make the trade.

Other housekeeping will include the liquidation of my remaining DUG position. Oil is nearing my target of $60 per share. OPEC cut production by 1.5 million barrels. It was not enough as oil is down some $4 in the early trade. I don't like the OPEC move and I feel fortunate that they did not go further in their cut. More is coming and my oil short could be manipulated by their actions. Best to lock in the huge gains and move on from there.

Jamie Dlugosch
The Rational Investor

Comments: View Comments |  Friday October 24, 2008  |  Stocks: DUG,

I sold one half of my position in the Oil Short Exchange Traded Fund ticker symbol DUG. With oil hitting my target of $80 per barrel earlier in the day I thought it would be prudent to sell some of this highly profitable position. As for the rest of the portfolio, keeping my powder dry has been a wise choice. The Rational Investor model portfolio is down less than 1% since the start of the year. That is huge outperformance as compared to the rest of the market. It may be time to start some buying. I'm alarmed that the market moved so quickly to the downside. It would have been preferable to see the losses over time as I believe the recession will be longer and deeper than most expect. This is not panic selling by the way. The market is moving Rationally on pricing given the profit expectations of the future. I'm just surpized at the quickness of the move. At times the market is efficient. I expect a strong bounce back rally, but I am not ready to deploy new capital at this time. I'll stay with 75% cash in the portfolio although that may change at any moment.

Jamie Dlugosch
The Rational Investor

Comments: View Comments |  Friday October 10, 2008