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Technology Stocks : Semi Equipment Analysis

SOXX 288.52

-0.3%

Nov 14 4:00 PM EST

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To: michael97123 who wrote (12450)	11/10/2003 9:31:57 AM
From: Kirk ©	Read Replies (1) of 95420

Bond Trading RE: My belief is that there will be a major correction when rates start to rise. Rule of thumb is the second fed rate increase but I suspect the correction will start on or about the first rate increase. Warning: There was a similar belief about a rising stock market after the first or second Fed Rate Cut. This expectation was not met. You might be right... but BTW, the FED keeps saying it is going to sit on rates for awhile because so many of us have kept money in cash rather than bonds while waiting for higher rates. I've been taking profits to stay roughly between 75:25 and 80:20 equities:fixed. I've had huge gains this year in my equities so it means my pile of cash is also growing. Normally, I'd rotate that $ into bond funds, but the risk was too high. Friday I decided to move some of that cash to Bond funds because if the stock market corrects short term, then bonds should do well again. I chart bond rates and try to roll cash into bonds when at the high end of the channel and I've actually taken money out of bonds when we get to the low end of the channel. Bond Rates are last 4 graphs here stockcharts.com\|D\|B14 Not a big deal but I can get extra portfolio gain from all this bond movement. For example, if a bond fund at Vanguard is paying 4.3% and that fund is up 4.5% YTD, then I sell a bunch of it. When the fund drops about 2% YTD, then I have bought some back. Right now, Vanguard Total Bond is up 2.08% YTD so I bought some back. If the Feds keep rates flat for some time, we can probably rotate money around this way but only once or twice a year as they discourage "market timing." I don't consider it market timing but "hitting price objectives" as well as asset allocation. Once a bond fund has met its coupon, then any further gains will be speculation in a flat rate environment...

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