Here are a few other terms to get you to buy at the top;
1) "People are Smart"- Oh really!
2) "BOOYAH SKEE-DADDY"
3) CNBC promoting-"Points above new all-time high" on your tv screen.
4) Valuation models suggest stocks are too cheap to pass up at these levels.
This morning the Federal Reserve added $19 billion in liquidity, of which $16 billion was added this morning.
Piggybacking on my comments yesterday ("Is the Plunge Protection Team at work?), the Fed said, "it would do all it can to facilitate the orderly functioning of financial markets."
Well I guess the PPT is at work.
Many small investors are asking themseleves if the current market correction "is the big one?".I don't think it is. That would be too obvious. The "big one" usually occurs without warning, and the Fed is following it's pre-determined plan to intervene in the markets before things got out of hand.
My downside target for the current correction remains around the 12,800 level. I never wait on "the bottom" before re-entering the market. Of course, dollar cost averaging in is the best way to build positions in your porfolio. I am not ruling out a full blown correction of 10% which would carry the Dow down to around 12,500-12,600.
The most attractive sectors for value investors are the financials, energy, homebuilders, REIT's, and select retailers. Many high quality bank stocks are now sporting dividend yields of 5-6%.
Last week, we raised our allocation to the stock market by 5%. If the DJIA drops to the 12,800 mark and/or the SPX to 1400, we will automatically raise our allocations by another 5%.
For now, we are content with an asset allocation of;
65% Equities: (Normally 95%) Aggressive
55% Equities: (Normally 80%) Moderately Aggressive
45% Equities: (Normally 60%) Moderate
25% Equities: (Normally 40%) Moderately Conservative
15% Equities: (Normally 20%) Conservative
At DJIA 12,800/ SPX 1400
70% Equities: (Normally 95%) Aggressive
60% Equities: (Normally 80%) Moderately Aggressive
50% Equities: (Normally 60%) Moderate
30% Equities: (Normally 40%) Moderately Conservative
15% Equities: (Normally 20%) Conservative
