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Wednesday, February 06, 2013

Bob Brinker's Current Advice

Bob Brinker continues to recommend fully invested positions in his three model portfolios.  He has not called for a bear market. His model portfolios one and two are 100% in equities.  His "balanced" model portfolio three is about two thirds in equities with the other third in fixed income.  He has not called for re-balancing model portfolio number three back to 50:50 either.

Read more at Bob Brinker's Asset Allocation History

Note, when the market was last at its all time high in 2007 Bob Brinker also was fully invested and he had model portfolio #3 at two thirds equities and one third fixed income.  (More explained below these graphics)

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Note how my "core" portfolios were above 2007 bull market highs by 2010.  My explore portfolio is more volatile so it took longer to reach all time highs shown in this next graph
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Bob Brinker completely missed the 2008/2009 bear market and so he didn't have funds to buy after the market fell 57% from the peak.  You can see from my portfolios below, by rebalancing. I took profits at the top in 2007 and my core portfolios were at new all time highs by the end of 2010, over two years ago!  They are even higher today. 

I believe it is hubris to believe you can time the market well enough to miss bear markets.  Brinker, recommending QQQ at the top of the NASDAQ bubble and issuing a "gift horse buy" at the top of the 2007 bull market is proof of that. 

I believe taking profits when up once a year at a minimum to have funds to buy when low makes far more sense then "market timing."   I was named one of the "Timer Digest" top ten long term timers at the end of 2012 and I was listed on their most recent bi-weekly update of top timers. It is a great honor but I only rely on timing for a small part of my newsletter advice.

Good news! My explore portfolio and my core portfolios are at record highs!

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