Q.
Tom,
Some of my mutual funds have been rapidly declining lately. I have been following newports recommendations and have found this is depleting my cash reserves rather quickly. I have been entering prices on a weekly basis and have received buy signals weekly. I have only about $500.00 cash left in my pbegx account. Do you think it would be prudent to slow the buying down?
How would you accomplish this? Please reply. Thank you.
Sincerely, Ken
A.
Hi Ken,
It sounds like time to fatten up your BUY Resistance (SAFE). You'll want to be able to continue to buy all the way to a market bottom, in theory, and THEN run out of cash!
How large was your cash reserve in percent of total portfolio value before the buying started? The IW has been recommending about 32% in recent months. This should have been enough for even aggressive growth funds line pbegx even with SAFE set at 0.0%.
To set the Buy Resistance to the proper level, think about what price you feel would be near the bottom. Then, using the What If window, adjust the Buy Resistance to inhibit any buying until you get to that magical value. Then you will exhaust your cash at about the same time the market bottoms (in theory!!!).
I hope this helps, please let me know how you make out. I have been in the Buy Mode with my 20th Century Vista account recently as well. However, it's just getting going. I was at about 32%-33% when this buy cycle started, but it's not done that much buying yet. Maybe pbegx has greater downside movement.
Best regards, Tom |
