Did You Buy on the 10% Correction Weakness?

For several years Moneytalk host Bob Brinker has said he likes to dollar cost average on weakness with new money.  By my eyes, this chart shows the market corrected by 10% and many stepped in to buy which caused the market to soar.

Note too that this correction touched my dashed green support line and the depth of the correction was the "best weakness" the market has seen going back to 2012!

Intraday "Correction" Statistics for 10/24/14

See S&P500 Chart

• Last Market High 09/19/14 at 2,019.26
• Last Market low 10/15/14 at 1,820.66
• Current S&P500 Price 1,964.58
• Decline in Points = 54.68
• Decline in percent = 2.7%
• Max Decline = 9.8%

=>This means the decline from intraday high to intraday low is 9.8% and we are currently only 2.7% the all-time record high.

On October 13, I posted this FREE blog article:

• S&P500 Hits 200 Day Moving Average While Fear & Greed Index Inches Higher 

On October 15, I posted this FREE blog article:

• Market Down 10% on Ebola Fears 
  
  

Did you do any buying on the recent 10% weakness?

I did!  I also sent email alerts to my newsletter subscribers announcing we reached some of my buy targets published in my September newsletter as a reminder.

For more market data, see:

• Stock Market Update - Sunday October 26, 2014

Brinker Fixed Income Advice & Stock Market Returns 2014 YTD

Yesterday all markets (not counting dividends) closed in the red.

Bob Brinker's Marketimer newsletter has an "Income Portfolio" but Bob Brinker doesn't usually report monthly results for it.  This year the bond market has surprised many with how well it has done despite the fear of the Federal Reserve increasing the Fed Funds short term rates in 2015.

This article is an update of our Sept. 12, 2014 article;

"Bob Brinker's Marketimer Income Portfolio and Radio Advice for Cash"

This graph compares the four funds in the Marketimer Income Portfolio with Vanguard's GNMA fund and the Total Bond index fund.

Fund summary:

• DLSNX, up 1.46% YTD
• FFRHX, up 0.79% YTD
• MWLDX, up 1.59% YTD
• OSTIX, up 1.86% YTD

With 25% in each at the start of the year, the average is +1.425% YTD.

Compare that to:

• Vanguard GNMA fund, VFIIX, up 6.16% YTD
• Vanguard Total Bond Index Fund, VBMFX, up 5.67% YTD

The "Marketimer Income Portfolio" has drastically under performed the total bond index and Vanguard's GNMA funds this year.  Of course, safe CDs and Series I Bonds, that I recommend have done the same but they have zero credit or interest rate risk.

• Current Series I Bond Rates
  
  
• Best Savings Account Rate Survey 

I don't like SOME of the funds in Brinker's income portfolio because their returns are correlated to the stock market (they go down when stocks go down) which exactly the opposite of what you want in a "balanced portfolio."   The two funds that have seen returns plunge much like the stock market are loaded with high risk "junk bonds" that do poorly when stocks do poorly.  

I'd rather own stocks with half my balanced portfolio in something like the Total Stock Market (VTSMX) or the S&P500 (VFINX) and get higher returns when stocks go up then keep the other half in something completely safe like CDs and I bonds discussed above.

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Subscribe NOW and get the October 2014 Issue for FREE! !  

Income Portfolio YTD vs Vanguard GNMA and Total Bond Funds VFIIX & VBMFX

Bob Brinker's Marketimer newsletter has an "Income Portfolio" but Bob Brinker doesn't usually report monthly results for it.  This year the bond market has surprised many with how well it has done despite the fear of the Federal Reserve increasing the Fed Funds short term rates in 2015.

This article is an update of our Sept. 12, 2014 article;

"Bob Brinker's Marketimer Income Portfolio and Radio Advice for Cash"

This graph compares the four funds in the Marketimer Income Portfolio with Vanguard's GNMA fund and the Total Bond index fund.

Fund summary:

• DLSNX, up 1.46% YTD
• FFRHX, up 1.31% YTD
• MWLDX, up 1.48% YTD
• OSTIX, up 2.13% YTD

With 25% in each at the start of the year, the average is +1.595% YTD.

Compare that to:

• Vanguard GNMA fund, VFIIX, up 5.57% YTD
• Vanguard Total Bond Index Fund, VBMFX, up 5.09% YTD

The "Marketimer Income Portfolio" has drastically under performed the total bond index and Vanguard's GNMA funds this year.  Of course, safe CDs and Series I Bonds, that I recommend have done the same but they have zero credit or interest rate risk.

• Current Series I Bond Rates
  
  
• Best Savings Account Rate Survey