Bob Brinker Sees 1900s for S&P500

With the S&P500 just 1.4% below its all-time closing high at 1864.85, Bob Brinker remains fully invested.  This summary is an enhanced version of what I got from reader via email:

Bob Brinker continues to be constructive on the Equity markets and increased his estimate for the S&P 500 to trade into the low-to-mid 1900’s range going forward. 

Brinker says the fact the stock market has not experienced a significant correction (10% or more) since the autumn of 2011 cannot be ignored. 

Given the fact that 2014 is a mid-term off-presidential year, Brinker believes’ that the probability of a meaningful correction this year is high. A correction of at least 8% has occurred in every mid-term off-presidential year since 1960. 

Brinker views a correction as a health restoring event for the equity markets.  That means he is not predicting a bear market. 

Brinker is unenthusiastic about adding new money to the stock market at this time.  

Brinker recommends dollar-cost-average purchases to be made on market pullbacks when possible. 

In order to reduce interest rate risk, Bob has replaced all the Bond Funds in his recommended portfolios to lower duration Funds.

It seems Brinker has been weary of this market for a long time. This is what we reported (Feb 24, 2013 Summary) Brinker said in February 2013, over a year ago

Brinker Comment: The stock market indexes are all at or close to their 2013 year-to-date highs and for the most part the highest levels in several years. Those indexes have been strong year-to-date. Having said that, there is a lot of bullish sentiment. A lot of the indicators are showing a lot of bullishness. Usually, at some point, that kind of over-zealous participation is very frequently cause for profit taking. So if you see some profit taking coming into the market, you should not be surprised given the high level of sentiment in a number of indicators.

From a summary of the March 2013 Marketimer posted on the "Bob Brinker Asset Allocation History" we have Brinker also cautious:

"The S&P500 Index has the potential to trade in the mid-1500s range.... The absence of a health restoring correction in 2012 remains a concern"

There you have it.  Brinker has all bases covered.  If the market goes down, he can say he warned it might go down and not to put new money in.  If it keeps going up, as it always does eventually, then he's fully invested and can point to that.

Learn the "Core and Explore" approach to investing
with "Kirk Lindstrom's Investment Letter"

Subscribe NOW and get the The Sept 2014 Issue for FREE! !   
(Your 1 year, 12 issue subscription will start with next month's issue.)(More Info, Testimonials & Portfolio Returns)

Bob Brinker GNMA Advice

Moneytalk with Bob Brinker Commentary for March 17, 2014 Radio Show

The following commentary is from my "Retirement Advisor" writing partner,  David Korn. 

Caller: This caller heard Bob saying recently that he thought GNMA’s would take a hit and that he was no longer recommending them.  The caller said she still owns a large position in GNMAs and wanted to know what Bob would do.  

Bob said his recommendation against owning the GNMA fund is based on a risk/reward decision over a long period of time.  Bob said he is recommending shorter duration fixed income securities as part of an overall diversified bond portfolio.  Bob said the average duration he is recommending is about 1 year.  The GNMA fund duration is typically several years.  Bob said he thinks we will eventually see a normalization of interest rates and when that happens you will see the net asset value of the GNMA degrade and given what they are paying it is not worth the risk.


David Korn: The Vanguard GNMA fund (VFIIX) that Bob recommended for so many years is actually up 2.48% year-to-date, not too shabby at all. It has a current yield of 2.80% and its shares closed Friday at $10.62.

See my article:

Monday, July 15, 2013: Bob Brinker Fan Club:
Sell GNMA to Buy Fidelity Floating Rate Income Fund, Good or Bad Advice? 

•  More about  the Vanguard GNMA fund (VFIIX)

Subscribe Today to the Retirement Advisor

FREE==> SAMPLE Issue  <== FREE

More information:

• Kirk's Two Investment Letters - Best Retirement Portfolio For You
• Retirement Advisor Performance by Year

The above commentary is courtesy of my writing partner, David Korn: 

David Korn's Stock Market Commentary, Interpretation of Moneytalk (Bob Brinker Host), Financial Education, Helpful Links, Guest Editorials, and Special Alert E-Mail Service.  Copyright David Korn, L.L.C. 2012

 If you would like a free sample of David's complete "Brinker related newsletter" and his "Retirement Advisor" newsletter, then click this link to send an email request and please tell us a bit about yourself too.