Bob Brinker Market Advice & Marketimer Special Bulletin

This article gives a short update on the stock market followed by an update of Bob Brinker's May investment advice.

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Market Update:  The four major US stock indexes I track are all in the green year-to-date (YTD) with the Nasdaq up 7.6% and the Dow only up 0.7%.

This year the market as measured by the S&P 500 had its fourth largest correction of 12% since the secular bull market began in March of 2009.  It would be very bullish if the S&P 500 corrects down to the falling upper dashed green support line then quickly reverses.   

Likewise, it would be very bearish for it to drop below the lower dashed green support line where filling the gap at 20% off the record high would be highly probable. 

Bob Brinker remains firmly in the Bull Camp:

• Bob Brinker did not issue a "Special Bulletin" to take profits before that correction nor did he issue a bulletin to buy when the market was down 12%.
• Since March 2003, Bob Brinker has had his portfolios one and two 100% in equity mutual funds.  See Bob Brinker's Asset Allocation History.
• Brinker continues to favor dollar cost averaging new money into the market "especially during periods of weakness" which he has not defined.
• Brinker says if a "Marketimer buy signal develops" between his monthly newsletters, then he will "post a Special Subscriber Message for access" at his website.   How old fashioned is that?  I send email alerts the same day, usually within hours when I buy or sell something in my portfolio.  Below my newsletter ad is an example.
• Reading between the lines, the fact Brinker only talks about a special message for a "Buy Signal" between monthly newsletters is a clear indication he's firmly in the Bull camp.

Twenty years ago the market was down a similar 10% and Brinker talked extensively about it on his show and in the newsletter.  He even issued a special buy signal just before it fell another 10% to make an official intraday bear market correction.  
Many of my online friends who follow the markets and especially Brinker lost faith in how he handled this miss. That is he didn't discuss why he was wrong or what he learned. 
My guess is the markets look similar today... they've have a huge run up but are not over valued like they were in 2000 but they are highly valued on a PE ratio basis as you can see in my table in my Brinker article "Bob Brinker Stock Market Targets."

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More articles:

• Bob Brinker Stock Market Targets
• Beware of Annuities
• Winning the Zigs, losing on the Zags - Why small investors usually do poorly
• Make Money In A Flat Market With Asset Allocation & Market Volatility

Bob Brinker's Latest Investment Advice

Bob Brinker has a weekly radio show "Moneytalk with Bob Brinker" and writes or contributes to two investment letters, "Marketimer" and "The Fixed Income Advisor."  His Son, Bob Brinker Jr., owns the fixed income newsletter and Brinker Sr. is listed as a contributor.  Bob Brinker Sr. started "Marketimer" in the 1980s when Bob. Jr. was just a lad.

Bob Brinker, in his January 2018 "Marketimer" newsletter, remains fully invested with his model portfolios one and two 100% in stocks.  He has not taken any profits or raised any cash for any potential corrections or bear markets.

 "The Current Marketimer economic outlook for 2018 does not anticipate a recession... the risk of a bear market decline in excess of 20% is low... the most likely risk for the stock market is the development of a mid-term off-presidential election year correction. Whether such a decline is a major correction of 10% to 20%, or a smaller decline of less than 10%, remains to be seen... all Marketimer portfolios remain fully invested." 

Bob's Advice for New Money:  Bob continues to say "we recommend a dollar-cost-average approach for new money, especially during periods of market weakness."  He doesn't define what market weakness is and given we have not had a market decline over 8% since early 2016, you have to wonder why not jump in right away or be more definitive.

See below for my advice for new money:

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Recently a reader send me this question about investing a "large sum of money."

I’m listening to Brinker right now. He just had a woman call in telling him she had a large sum of money and gave Bob a variety of ways to invest it in the market asked Bob which was the best way to go. Bob segwayed into asset allocation....and never did say which was the best way to invest a large sum of money in the market. 

Do you have a recommendation on the best way to invest a large sum of money in the market?

Here is my reply

If you don't mind, I'll use your EXCELLENT question for a short blog post and share my reply.  

Statistics show lump sum is best as many (perhaps thousands) listen to Brinker and think they should DCA on "weakness" so they never get in until a market top.   

IF you have the discipline to do monthly DCA into the funds I recommend in my newsletter,  you can have Vanguard set it up for you automatically since all my funds are at Vanguard with ETF equivalents you can buy anywhere, then do the DCA following the plan listed on pg 35 or my September newsletter near the bottom. 

As for asset allocation, I like being aggressive with money I made and saved while working but for inherited money, I like to keep the memory of who gave it to you alive so I recommend that go into my "Core Conservative" portfolio. 

Brinker is far too careful to make sure he doesn't give any advice that someone can say was "wrong" with market timing and cares less about helping people.   Think of all the years he's said to " DCA on "weakness" and the market has pretty much gone straight up!  You can see from my advice on pg 34 of my newsletter that I have a SIMPLE PLAN to accelerate DCA payments if the market corrects.  It is one reason I lost respect for Brinker.

Market & Bob Brinker Marketimer Update

Friday the S&P500 and Dow Jones Industrial Average closed at new record highs.

The Nasdaq & Russell 2000 are down 0.2% to 1.3%, respectively from their earlier highs.

Market Scan Charts

My Explore Portfolio, with many small cap & NASDAQ stocks, is just 0.3% below its record high.

Bob Brinker, in his September 2017 "Marketimer" newsletter, remains fully invested with his model portfolios one and two 100% in stocks.  He has not taken any profits or raised any cash for any potential corrections or bear markets.

Kirk Lindstrom's Investment Letter

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(Your 1 year, 12 issue subscription with SPECIAL ALERT emails will start with November issue.)

Bob Brinker's Infamous QQQ Trade

Happy New Year!

These are updates of articles I wrote at Suite101 that vanished after I left.

• Detailed summary of Bob Brinker’s QQQ Advice
• Bob Brinker's Follow-up QQQ Advice

This is yesterday's article that updates 2014 global market performance:

• Jan 01 Year 2014 in Review  - Happy New Year! 

Top Newsletters Cover Feature

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)

Click images to see full size views.

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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

Click images to see full size views.
and
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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!