Okay I’ll admit it… I’m getting more defensive. I’ve always been an optimist and invest on the Bull side, yet perhaps the kind who likes to “make sure” and check on things to ensure their progress is on track. Lately however I’ve been uneasy. Why exactly? A lot of things. I’m no economist so I won’t roll out a bunch of statistics that, although I enjoy reading, I simply don’t enjoy justifying. But I look at the same news and data that most amateur investors do, and even though I’ve been doing it a long time all I’m sure of is that nothing is for sure. So with the subprime mortgage woes, the seesaw economy, the new highs for the indexes, the mideast turmoil, and a couple years of heavy political wrangling before an election plays out… I think I finally decided to get more defensive. I say more because I’ve already been 60/40 stocks to bonds. But now I’ve rebalanced my portfolio to about 35/65 stocks to bonds.  I still own eBay because I’ve made some nice gains over time and consider it a long-term investment. I also own GE both because I’ve had it a long time, and it provides a steady dividend return with a company that is probably the broadest reflection of the economy in one stock I can find. It hasn’t shined in quite a few years, but that may be changing soon. Finally I own some ConocoPhillips because I believe they are well positioned over the long-term in the oil sector and can weather a storm should it arise. Aside from those stocks I own both Balanced and Growth mutual funds in my Roth IRA with more emphasis on the Balanced funds. My research on the expected yield of my portfolio ranges from 5% to 7.5%.  The Balanced funds may do much better. But should we tip into a recession, and should the market reverse itself, I’ll be decently positioned to ride it out. I personally believe we’re going to see about a 5%-7% return over the next couple of years or longer. I also believe the housing market is going to take 3-5 years to work through the supply and demand curve, with home appreciation stagnating during that time. When will I become more bullish? When the mideast issues become clearer in a couple years… when the election is over… when interest rates don’t go up over the next two years… after the market corrects more than 10% at least twice in the next 3 years… when it stops raining…. how the heck do I know!? But that’s where I am. I’ve got to honor my gut instincts. If I’m wrong and miss out on the next leg up? So be it. Something else I’m becoming as the years go by? More patient.
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