Monday, June 10, 2013

DITM UPDATE: June 10,2013

After more than two weeks without a DITM update, now is a good time for one. For the first time in 2013 the portfolio took its first loss of the year, albeit a minor and voluntary one - QRE. This had been a profitable trade in 2012 but, not doing the best effort in Sector selection, I was too heavily weighted in Energy/Natural Resources (since that was where the yields were). Previous loss in 2012 was PGH, also a high-yielding Energy stock.

Although I still feel the DITM is the optimal strategy for zero interest rates, at least for seniors, retirees and other prudent investors - at least with a portion of assets- the reason for fewer updates is being fully invested in DITM, there is not much activity or monitoring needed- a plus.

Although a four-year wrapup of DITM testing yielded @ 10% annual results (the longtime historical yield of stocks), it has underperformed the four-year Bull market from March 2009 ( DITM started in May 2009). The four year record of my small IRA (sans contributions and RMD withdrawals) consisting of 5-6 stocks, hit a record high earlier this year, averaging 11%/year since 2009. Coupled with the safety net and riding through a dozen or so "Corrections" (one near-Bear), so far 2013 closed trades (opened in 2012 and 2013) averaged 15.3% annualized. Without the loss of QRE it would have been 17.1%.

The 2013 winner (not recommendations) were LINE,KKR, SIX,INTC,STX,GE,BBY.
Current positions include HRB,NEM,UVV,CLMT,LMT,LO,ESV,DVY.
Disclaimer: If the nasty Bear market that Garrett Jones predicted last weekend at the Bloomberg HQ meetup with TSAA/MTA actually occurs, or any Bear market - DITM will also lose money, if not hedged or exited - but not as much as an index fund (please see my last column on Garrett's excellent Technical presentation at:

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