Re-balance Cycle Reminder All MyPlanIQ’s newsletters are archived here.

For regular SAA and TAA portfolios, the next re-balance will be on Monday, June 22, 2015. You can also find the re-balance calendar for 2014 on ‘Dashboard‘ page once you log in.

As a reminder to expert users: advanced portfolios are still re-balanced based on their original re-balance schedules and they are not the same as those used in Strategic and Tactical Asset Allocation (SAA and TAA) portfolios of a plan.

Please note that we now list the next re-balance date on every portfolio page.

Summer Blues?

We generally avoid short term timing call because as stated numerously times before, we believe it is futile to predict markets in a short term. However, we do believe that one can use evidences that have shown statistically significance (or in plain language, likely to happen) to help to position one’s portfolio, especially in overall risk management. Currently, we believe there are two significant phenomenons that warrant investors’ attention. 

First, market conditions are not optimistic. Stocks are over valued based on many long term metrics (see Market Indicators): 

  • Buffet Stock Market Indicator: The ratio of the total stock market capitalization to GNP is 145%. US stock market is Significantly Overvalued. 
  • Shiller CAPE10: The ratio of Real Price to the average of last 10 year Real Earnings(CAPE10)(28.01) to its long term average (16.61) is 1.69. US stock market is 69% Overvalued. 
  • Hussman Peak PE: The ratio of Real Price to the average of last 10 year Peak Real Earnings(19.96) to its long term average (12.08) is1.65. US stock market is 65% Overvalued. 

Not only stocks are overvalued on a long term basis, they are also at an elevated level for a long time. In fact, US stocks haven’t had a correction of more than 10% since 2011. Market internal conditions are also showing more divergence including thin volumes on rising days and heavy volumes on falling days; widening bond spreads between high yield bonds and Treasury bonds; side way distribution of broad stock market such as NYSE composite index for a while now (see Hussman’s commentary).

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