Yes, I must admit it...this week we sold all holdings and took profits on all of them.  Does that make me a bad person?

After all, isn't taking profits and avoiding losses the purpose of investing? 

 

The Market this week decided to misbehave and gave out more mixed signals than a teenager at a Junior Prom.  Both Monday and Tuesday the market declined under heavy volume selling, taking along with it some of our hard earned gains over the past two weeks.  Therefore, we decided to sell and take those profits.  The results are illustrated below in this Newsletter.  This week is a prime example of how the Market is not linear in its movement, whether it is rebounding or trending downwards.  In other words, while there are clear signs of a turnaround, weeks like this send shock waves through portfolios.  One must stay alert and vigilent when dealing with a market trying to rebound.

 

A major cause of the meltdown this week was disappointing retail sales data which showed a decline of 1.1% in March.  This certainly suggests that the consumer is concerned about the economy and keeping credit card debt to a minimum.  The only categories showing sales growth in March were food, health & personal care. March retail sales fell by almost 9.4% on a year to year basis;  a figure not seen since post-World War II.

 

The Market continued its Jekyl & Hyde personna the rest of the week, albeit with much lesser volume trading than the previous two days, except for Thursday when volume was appreciably greater.  On Thursday the Market chose to ignore much of the economic news. For example, the Treasury auctioned off a net $97.0 Billion in new bonds in February, and foreign money (mostly from China) purchased close to $22.0 Billion.  The fact of the matter is that less money is pouring into the USA than before.  Especially so when factored with our trade deficit of over $25.0 Billion.  Add to this the tremendous amount of deficit spending underway to stimulate the economy, one wonders how will we ever get foreigners to buy more treasury bills in order to subsidize our growing debt.

 

The market climate is still dysfunctional, although we still feel that a rebound is clearly in the making, but any short term turnaround was dampened by this week's selling. 

 

It is going to be a beautiful weekend if you make it so!  Have a great weekend!