    Lots of news out this week and the market keeps rolling along. I’m not sure what to think about the new highs we keep seeing, but apparently there’s new money coming into the markets in force these days. Ron Scherrer from The Christian Sience Monitor via Yahoo has an interesting article titled Dollar Buying Ever Less of the World’s Goods. Interesting that it speaks to the effect of the weak dollar actually helping reduce the U.S. trade deficit and helping the U.S. economy through foreign investment in the U.S. The weak dollar also continues to help U.S. companies overseas because of more competitive price margins. All in all it’s quite a balance to the economy here at home.
Will we have a recession in the next 12-18 months? Many think so especially with the housing weakness and high food and energy prices. But the traditional CPI numbers technically exclude food and energy and have remained tame thus far. But those food and energy costs are very real for most of us… and must be reflected somewhere over time. Yet the markets look strong… for now. Somewhere down the road we’ll see weakness, but hopefully not for long. For now I’m positioned to ride it both ways… not as growth oriented as I could be, but balanced enough for the long portfolio. Actually, should the market reverse itself in coming weeks I’m not prepared or willing to sell anything. I like where I’m positioned, but then again I’m never quite satisfied it seems! For tinkerers like me who tend to want to “improve things” it’s hard to establish a portfolio and not want to make changes for the sake of change. But that is a subtle threshold that, once crossed, becomes a self-defeating process.
For now I’m thankful to see some real portfolio growth over time. For the days when it’s tough to remain patient, I just take out the calculator and look at some long numbers down the road. Those numbers over the years are like benchmarks or goals for me. If I can achieve my goals over three years, five years, and ten years… then I’ll be right where I want to be in twenty or thirty years. And yes, I’ve got a benchmark for that too! In many ways, I’m thankful to have the perspective of the long view. When I want to “do more” I look at saving some money for investing and then explore opportunities. I have a short list of several stocks I’d love to own, but I’m not willing to pay what I view as high prices at this point.
One of Dennis Gartman’s famous rules for investing is to “Buy high and sell higher” because we don’t really know what high or low is regarding price in a moving market. You’ve got to make the call somewhere though. So I try not to tinker, simply rebalancing the portfolio once or twice a year based on my goals and asset allocations, and putting new money to work where it seems most appropriate. Got to have goals though… no matter how small… one step at a time.
“If you don’t know where you’re going, you will probably wind up somewhere else.”
Laurence J. Peter
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