Saturday, December 31, 2016

2016 Year end, 662-115, grade B-

I count 662 winners, 115 losers for calendar 2016. Win percentage is about 85%, which sounds good, but those are about the odds that I look for. The payouts tend to match the odds. So a few big whopper losers offset a lot of small and tiny profits. The vernacular description is eat like a bird, poop like an elephant. 

I was up about 9.8% for the year. I see this is as a cup half-full result. I started the year with a dip and was down -6% early on, so any positive result from there seems good. So not a champagne year, but a glass of wine or mug of beer seems right for the toast for this New Year's Eve.

Here are a few etfs I track, best to worst for 2016:

IWM +19.7% Russell 2000 U.S. small cap
SLV +14.6 Silver

SPY +9.6 S&P 500 U.S. large cap
EEM +8.8 Emerging market stocks

GLD +8.0 Gold
TLT -1.2% U.S. 20 year treasuries

So my +9.8% was right with SPY, but slightly lagged after factoring in the 2% SPY yield. TLT had the wild ride up over 15% at one point, only to give it all back after the election. 
I wish I knew what was going to happen next. I'd make a lot better than 10% if I knew. I still see quite a bit of online chatter about a stock market crash, so that seems like the least likely outcome. However, a -5% or -10% correction can come at virtually any time. 

The AAII sentiment reading (link) is at +45% bulls. To me, this seems more like a smart money indicator at this point. People in the American Association of Individual Investors tend to be older, wiser than the young hotshots that dominate some sections of the Internet. So I remain cautiously bullish.

For long term positions, it seems too early to rebalance into bonds. An inverted yield curve is the flashing red light indicator. We are long way from that. An inverted yield curve is also a flashing red light indicator to avoid the long side of the stock market. I'll flash the "Bat signal" for those that don't know what I am talking about. The yield curve tends to be a long term indicator, so there will be time to make moves as the curve flattens then inverts.

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