Market Timing | Slack Investor

Alignment

Four of the planets that are visible to the naked eye – Saturn, Mars, Venus and Jupiter were aligned on **April 24, 2022** at 4.40am visible from Southbank, Melbourne – SBS Australia

We have 8 planets in our solar system (sorry Pluto!) all whizzing around the sun at different rates, occasionally they “align” when the planets line up or appear close together in a small part of the sky .

Planetary Alignment is a special thing, depending on which planets are involved – and their order. Sadly, Slack Investor wasn’t paying attention when 4 of the 5 planets visible to the naked eye (Mercury, Venus, Mars, Jupiter and Saturn) appeared in a line around the world on April 24 2022.

The bright string of lights in the morning sky (in April 2022) is thought to be a one-in-1000-year event.
Australian Geographic

Slack Investor is coming to the planetary alignment party very late and is now setting his sights on September 8, 2040, when five naked-eye planets (Mercury, Venus, Mars, Jupiter, and Saturn) will be within a circle of 9 degrees in the sky.

Investing alignment

Slack Investor may be a poor astronomer but one of his skills is noticing when two of the most important attributes in the stock market have an alignment – Value and Momentum.

Value investing involves looking at stocks that appear to be trading for less than what they are worth using a value screener like “book value” or the Price/Earnings ratio. Slack Investor likes to use the Cyclic Adjusted Price Earnings Ratio (CAPE) as a broad indicator of value – the lower the CAPE, the better the value.

Momentum investing just uses charts and indicators to pick out the current movement of a stock. Based upon the theory that – If the trend is upwards … it is likely to continue upwards. This is tricky though … the trend is your friend … until it isn’t!

Because trend trading is difficult, I always like a bit of assurance or alignment with value. Ideally, I like value and momentum in a stock before parting with Slack cash.

Value

It has been 6 months since I produced a set of index value charts based upon CAPE to look at how the markets are travelling.

As with individual companies, the whole share market will oscillate between overvalued and undervalued. Slack Investor has written about the Cyclically Adjusted Price to Earnings ratios (CAPE) which use ten-year average inflation-adjusted earnings. By plotting this CAPE over a period of time, we can look at how the whole sharemarket is currently valued in terms of historical data.

Using monthly CAPE data from Barclays, the 40-yr mean is calculated and plotted together with the CAPE values. A “fair value” zone is created in green where the CAPE is within one standard deviation of the mean.

Historic CAPE ratios for the ASX 200 – From 1982 to April 2023– Click the chart for better resolution.

Historic CAPE ratios for the FTSE 100 – From 1982 to April 2023– Click the chart for better resolution.

Historic CAPE ratios for the S&P 500– From 1982 to April 2023 *– Click the chart for better resolution*.

From the above, The ASX 200 is right on fair value (1% above av.) and the FTSE 100 is cheap (5% below av.). Both are worth looking at for the moment as their CAPE values are at, or below their long-term averages. The S&P500, is still in the “Fair value” range, but at 20% above the long term average – so, no bargain here.

Momentum

There are lots of stock indicators that track momentum. Slack Investor has blogged about The Coppock Indicator before. It has had an incredible track record in signalling the end of a “bear market”. The signal (Green Arrow) is triggered when the indicator (shown in the lower screens below as a white line) bottoms from under the zero line and then slopes upwards.

Monthly charts of the ASX 200, FTSE100 and S&P500 together with the Coppock Indicator (White Line) in the lower section of each chart. The green arrows show the “bottom of the market” predictions using the Coppock Indicator. The red arrows show a possible time to sell – Click the chart for better resolution – Incrediblecharts.com

The ASX 200 (Since 31 Jan 2023) and the S&P 500 (Since 31 Mar 2023) are showing signs of recovery from the bear market with the is well into the Coppock recovery cycle. The FTSE 100 is also showing signs of recovery, but as the Coppock indicator did not get below the zero line, this is not a proper Coppock reversal.

Alignment of Value and Momentum Together

Slack Investor will again rant about how market timing is difficult and that the best time to buy stocks is “all the time” – by automating your investments so that their is no decision inertia. Use dollar cost averaging.

However, the Coppock Indicator has been reliable so far in predicting stock gains. This is not advice, but the ASX 200 currently has the alignment of both value and momentum indicators. Alignment is good … If I wasn’t already fully invested, I would have a crack!

ETF Themes … and Dreams

It has become quite fashonable, worldwide, for new ETF’s to be launched onto the market with a “theme”. Robotics, Alternative Energy, Cryptocurrency, Battery Tech, or Artificial Intelligence are just some examples of themes where an ETF provider will bundle a number of companies together with a catchy ticker.

This trend seems to be also happening in Australia. Investsmart has been following the performance of a few of the new Australian thematic ETFs e.g. HACK (Cybersecurity), ERTH (Climate Change Innovators), ACDC (Battery Technologies and Lithium), ESPO (Gaming and eSports), CRYP (Cryptocurrency), CLDD (Cloud Computing) and DRUG (Healthcare). Their results, since the ETF inception dates, are a mixed bag. ACDC, DRUG and HACK outperformed the ASX200, while ERTH, ESPO, CRYP and CLDD have underperformed.

The two main problems with themed ETF’s is that they are generally expensive – have high management costs relative to other broad index ETF’s and, they concentrate risk in just one part of the market – the theme might suddenly fall out of favour e.g. ARKK.

The themed ETF’s generally have management fees of over 0.50% p.a., wheras broad Index funds have fees closer to 0.10%p.a. – Financial Times

In a comprehensive study (over 25 years) of US ETF’s, The Ohio State News concludes that these new themed ETF’s are based mostly on “hype” and they tend to lose value in comparison to the general market very soon after they are launched.

… specialized ETFs lost about 6% of value per year, with underperformance persisting at least five years after launch.
The Ohio State News

Thematic ETFs are often launched near the top of the market when interest in that theme is at a high. As a result, the stocks in the thematic ETF can start overpriced, resulting in underperformance.
Investsmart

In the U.S. of the 277 ETFs that shut down in 2020, one-quarter of them didn’t make it to their third birthday
Stockspot – Why we avoid new thematic ETFs

Slack Investor Themed ETF Record – Not Good

Slack Investor has also not been immune to the “hype” and has bought a number of themed ETF’s, as well as a few broad-based index-type ETF’s. The latter, of which, I am generally happy with their long-term performance. My thinking was to get onboard, in a relatively easy way, to some exotic investment themes.

In the past 5 years I have bought VanEck Morningstar Wide Moat ETF (MOAT), Vanguard FTSE Emerging Markets Shrs ETF (VGE), BetaShares Global Cybersecurity ETF (HACK), BetaShares Glb Rbtc & Artfcl Intlgc ETF (RBTZ), BetaShares Asia Technology Tigers ETF (ASIA), VanEck Video Gaming & eSprts ETF (ESPO), BetaShares Global Quality Leaders ETF (QLTY), Global X Battery Tech & Lithium ETF (ACDC), and Vanguard FTSE Emerging Markets Shrs ETF (VGE).

With hindsight, I can see the trap that I have fallen into. For example, E-Sports. I had read about E-Sports in the press and didn’t know much about them – except that they were popular, and they were the new “thing” – and growing fast. I didn’t know any individual companies in the field, as most of them were based in the US. When VanEck Bundled together a few of the E-Sport companies into a themed ETF, VanEck Video Gaming & eSprts ETF (ESPO) I was excited and bought into it. The trouble was, I was late to the party. As the chart above shows, by the time I entered the market, there was already a lot of hype, and the entry price paid was probably over-inflated.

The BUY-SELL price history of the themed ETF’s that Slack Investor has added to his portfolio. The first dot for each ETF is the BUY price and the second dot is either the SELL price, or the CURRENT price. If the lines keep going to the end of the chart (01/01/2023), then I am still holding the ETF.

When I plot out the price history of the themed ETF’s that I have bought over the past few years, the theme was not a dream. With the exception of the MOAT ETF, the flat or downward lines indicate a less than lustrous performance. Ideally, all my BUYS would slope upwards from left to right over time.

This chart is a good look in the “house of mirrors” for Slack Investor, I will continue to buy themed ETF’s in a small way to expose my investments to interesting sectors. However, I will modify my purchases of these themed ETF’s in the future – Or at least, wait a few years after launch for the excitement to settle down … and then invest.

Not all is lost, there are some bright lights amongst the themed ETF’s. The Morningstar Australian ETF’s top ten performers over 5 years ar a mixture of both themed ETF’s, and broad-based ETF’s. Over a realistic 5-yr time frame, where there is enough time for “our flowers to grow”, the top 10 annualized average 5-yearly growth is shown in bold. Over 10% p.a. is impressive – but you have to be lucky – or a great ETF picker.

Name	Yield %	Fees (MER%)	1-yr p.a.	3 -yr p.a.	5-yr p.a.	10-yr p.a.
BetaShares Global Sstnbty Ldrs ETF (ETHI)	2.61	0.59%	-15.41%	11.35%	15.13%	—
BetaShares NASDAQ 100 ETF (NDQ)	3.37	0.48%	-28.41%	9.25%	14.71%	—
BetaShares Global Cybersecurity ETF (HACK)	8.72	0.67%	-22.06%	10.68%	14.32%	—
Global X Physical Palladium (ETPMPD)	—	0.49%	-2.05%	-1.16%	14.17%	14.43%
BetaShares Australian Res Sect ETF (QRE)	14.54	0.34%	22.98%	13.80%	13.72%	7.71%
VanEck Morningstar Wide Moat ETF (MOAT)	—	0.49%	-7.38%	8.17%	13.37%	—
SPDR® S&P/ASX 200 Resources ETF (OZR)	15.64	0.34%	22.90%	12.96%	13.23%	7.49%
iShares Global Healthcare ETF (AU) (IXJ)	1.1	0.40%	1.90%	9.79%	13.11%	16.93%
iShares S&P 500 ETF (IVV)	1.42	0.04%	-9.03%	10.09%	13.03%	17.94%
Global X Morningstar Global Tech ETF (TECH)	4.99	0.45%	-29.06%	5.29%	12.76%	—

Gold Digger … and January 2023 – End of Month Update

The 2019 BBC TVseries Gold Digger delves into the messy world of a wealthy older woman who is swept off her feet by a younger man. Are his intentions honourable?

The term “gold digger” has been around for a while and is not a nice label to have. Usually defined as people who are in, or are pursuing, romantic relationships primarily for financial gain. However, Slack Investor is resolved to start digging for gold himself. Not just now, but whenever the stock market gets a bit over-valued again.

She take my money when I’m in need
Yeah, she’s a triflin’ friend indeed
Oh, she’s a gold digger
Gold Digger – Kanye West and Jamie Foxx

What turned my attention to gold, and the need to start digging, was this remarkable table put out by Stockspot. Over the past 5 calendar years, when comparing Global Shares, Australian Shares, Emerging Share markets, Gold, and Bonds. Gold has topped the Investment performance table in 3 of the past 5 years! Diversification, it seems, is important.

Yearly returns comparison of Global Shares, Australian Shares, Emerging Share markets, Gold, and bonds – Stockspot – Indices used: S&P/ASX 300, MSCI World ex Australia, LBMA Gold AM Price AUD, MSCI Emerging Markets, and Bloomberg AusBond Composite 0+ Year – Click Image for enlargement

In their usual thorough way, Stockspot has investigated the best way to own gold as an investor. Rather than getting a few nuggets or gold bars, they like to use ETF’s to gain exposure to gold. They analysed three ETF’s

Global X Physical Gold (GOLD)
Perth Mint Gold (PMGOLD)
BetaShares Gold Bullion ETF – Currency Hedged (QAU)

Weighing up costs, buy/sell spreads, liquidity, size and the type of gold assets held they decided that Global X Physical Gold (GOLD) was the best Gold ETF to hold. The liquidity (the ability to quickly buy and sell your gold using an ETF) is a huge factor. The management costs of 0.4% p.a. sounded a bit steep to Slack Investor but, I suppose, there are costs in having to house and secure these gold bars somewhere in a vault in London.

Slack Investor has no financial relationship with Stockspot but thinks they offer excellent low-cost, automaticilly re-balanced investing portfolios. Some of Stockspot’s portfolios hold, at times, up to 15% gold!

Slack Investor will start out small and just dip his toe into the water as there is the general Slack reluctance to hold a non-income producing asset. However, I can’t argue with the results of having gold in your portfolio during times of crisis.

89-year-old oil billionaire J. Howard Marshall II and 27-yr-old Anna Nicole Smith. They married in 1994. Following Marshall’s death after 13 months of marriage, Anna Nicole Smith unsuccessfully battled his son over her husband’s estate – From Interview Magazine

The tragic life, of Anna Nicole Smith is an eventful tale of a woman often labelled as a modern-day gold digger. Slack Investor hopes his gold digging will end more fortunately. Hopefully at some time in the future, during the delightful times when the markets are considered overvalued, Slack Investor has made “a note to self” – start digging for gold – and buy some gold ETF as insurance.

January 2023 – End of Month Update

Slack Investor remains IN for Australian index shares, the US Index S&P 500 and the FTSE 100. The Slack Investor followed overseas markets have had a bumper month to welcome the new year ( ASX 200 +6.2%; FTSE100 +4.3%; S&P500 +6.2%).

There was some adjusting upwards of the stop losses for the FTSE100 and the S&P500, with details on the UK Index, and US Index pages.

As indicated in the last post, the ASX market has reached a significant point at the end of the month. Shown in the bottom part of the chart, the Coppock indicator is moving upwards after a journey below the zero line. This is a prediction that the “bottom of the market” has passed and it might be a good time to buy (not advice). Also, the FTSE100 is moving upwards after a minimum – a good sign, but not a true Coppock prediction as the curve had not spent time below the zero line. The S&P500 Coppock curve has yet to turn upwards.

Monthly charts of the ASX 200, FTSE100 and S&P500 together with the Coppock Indicator in the lower section of each chart. The green arrows show the “bottom of the market” predictions using the Coppock Indicator. The red arrows show a possible time to sell – Click the chart for better resolution – Incrediblecharts.com

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).

The Hubris Ark

Cathie Wood CEO of Ark Invest – from Observer

hubris: (noun) – an extreme and unreasonable feeling of pride and confidence in yourself:
Cambridge Academic Content Dictionary

Cathie Wood is the CEO of Ark Innovation and is best known for her NASDAQ based flagship fund ETF (ARKK). She has been concentrating her bets on the “disruptive technologies,” such as artificial intelligence, genomics, blockchain and cryptocurrency, and clean energy. She is a big fan of Tesla and has made the prediction

Bitcoin will crack $1 million by 2030
Cathie Wood – The Street

Slack Investor is no seer … but at the October 14, 2022 price of 16240 USD, Bitcoin has quite a way to go to reach that mark. In the words of the great BBC TV character Sir Humphrey, this looks like a “very courageous” prediction Cathie!

The ARK Innovation ETF (Nasdaq: ARKK)

Wood, is a devout Christian, and has named her company after the sacred Ark of the Covenent. Cathie Wood is a household name in the US and has a huge number of loyal fans. Her funds had 60 billion USD under management at their peak. She was named by Bloomberg as Stock Picker of the Year in 2020 . The flagship ARKK fund gained a remarkable 152% in 2020, but since then, the performance has not been so stellar – ARKK is down 65% so far this year. In interviews, she often refers to her past success, and insists, over and over again, her performance should be judged over a five-year time horizon.

The Price chart of the ARKK ETF since 2017 –

Wood is nothing but confident. She hosts a monthly finance video – delightfully called “In the Know” and is a great defender of her fund. She sees “spectacular returns” for Ark Invest over the next five years. According to a recent article by New York magazine, her initial predictions for ARK Invest were annualized returns of 15 percent, “Now we think 50 percent.”

Slack Investor would agree that a 5-yr holding period is a good minimum to judge how a fund is performing – to allow for volatility and to allow growth stocks to grow. She might be right that tech stocks are undervalued at the moment. But let’s have a look at her results as a fund manager over the last 5 years. The total return of ARKK expressed as a compound annual growth rate (CAGR) since November 2017 was a not so impressive 3.5% when compared with other “no stock picking” index funds.

Instrument	Value Nov 2017	Value Nov 2022	5-yr CAGR
ARKK	36.44	43.31	3.5%
NASDAQ 100 TR	7159	13881	14.2%
S&P 500 TR	5212	8407	10.0%
FTSE 100 TR	6510	7564	3.1%
ASX 200 TR	56486	81102	7.5%

Based upon the 5 years preceding November 2022, the compound annual growth rate (CAGR) of various Total Return (TR) index values compared with the ARKK ETF (including dividends since Nov 2017 of $2.91 USD). These TR calculations include dividends. Data from Yahoo Finance and CAGR calculations from CAGRCalulator

Cathie Wood conducted a recent session at a Morgan Stanley event in Sydney. where she maintained her bullish outlook. According to the Financial Review, the fund manager essentially argued it’s the market that’s got it wrong, not her!

Slack Investor is far more humble … he “takes his licks” when times are bad – doesn’t “crow” when times are good – and is mostly wary when a new “stock guru” emerges.

In the stock market, volatility is the price he has to pay for being involved with long-term asset growth.

November 2022 – Mid-Month Update

This image has an empty alt attribute; its file name is trend-1445464__180.jpg

My small-scale, and often very frustrating, market timing experiment continues until its projected end in 2024. On a weekly signal for the FTSE 100 from the momentum following Directional Movement system. I have bought back into the UK index. I am back now to fully invested in the ASX Index, UK Index, US Index.

The buy signal can show itself as a downward dip in the trend strength indicator ADX (grey line) of the lower panel below. There are many ways of setting up this Directional Movement system. Slack Investor likes the “smoothing” that is enabled by a system that looks back over the previous 11 periods – but the complexities are best left for the Resources page.

FTSE 100 Weekly chart showing a BUY signal on the Directional movement Index *weekly chart. The weekly price ranges are at the top and Average Directional Movement Index (ADX) patterns below – From* Incredible Charts

The Index page has been updated for the UK Index .

Finding Value … and October 2022 – End of Month Update

In amongst the general carnage of the market, Slack Investor has been doing a little buying. An opportunity came up with an existing holding. Dicker Data (DDR). DDR is an Australian-based technology hardware, software and cloud distributor.

From time to time, a company will go to institutions and shareholders to raise a bit of working capital using a Share Purchase Plan (SPP). Dicker Data (DDR) needed to expand its warehouse facilities. Fair enough – but does Slack Investor want to part with more cash to invest in this company? Lets take a fresh look using the excellent Market Screener Financials Page. The Slack “basics” of a high return on equity (38.7% in 2022) and projected growth – on top of an established period of growth – are still intact – Tick

DDR – Historical (Black)and analyst projected income growth (grey) till 2024 – Market Screener

The price of DDR has been generally “beaten up” in the last 6 months as interest rates have risen and growth stocks have suffered. There are probably some more tough times ahead … but Slack Investor likes to take the “long view”. This business has a long term growth strategy and will probably persevere despite current headwinds – Tick.

DDR – Analyst projected PE ratio till 2024 – Market Screener

The current DDR Price/Earnings ratio is 22.9 – below recent values and projected to reduce further as income increases. – Tick.

Although analyst predictions can be wrong, on balance, the miserly Slack Investor was happy to part with a few dollars in this Share Purchase Plan as he could find some value in this business. There is every prospect that the DDR share price will increase in the next few years.

Finding Index value using CAPE

As with individual companies, the whole share market will oscillate betwee overvalued and undervalued. Slack Investor has written about the Cyclically Adjusted Price to Earnings ratios (CAPE) which use ten-year average inflation-adjusted earnings to take out some of some of the volatility of annual earnings. By plotting this CAPE over a period of time, we can look at how the whole sharemarket is currently valued in terms of historical data.

Historic CAPE ratios for ASX 200 – From 1982 to September 2022

Historic CAPE ratios for FTSE 100 – From 1982 to September 2022

Historic CAPE ratios for S&P 500 – From 1982 to September 2022

From the above, The ASX 200 (7% below av.) and the FTSE 100 (13% below av.) are “On Special” at the moment as their CAPE values are below their long-term averages. Even the S&P500, after a long 2-yr period of being “Over valued”, is now getting close to being “Fair valued”.

October 2022 – End of Month Update

Slack Investor remains IN for Australian index shares though it is still on watch after breaching its stop loss at the end of September 2022.

My last post described how I had left the UK and US Index in the middle of October 2022. I am now back IN to the US Index – and, for the moment, OUT of the UK Index. Although, I am keeping a weekly watch on the FTSE 100 in case there is a signal to return to the market.

This month illustrates why I feel glad that my 20-yr index timing experiment is coming to an end in 2024. After exiting the US and UK markets only 2 weeks ago, there has been a rally in both the US Index S&P 500 and (to a lesser extent) the FTSE 100. The momentum has been sufficient for Slack Investor to be “whip-sawed” back into the US Index on a weekly buy signal – I am starting to get “really over” this timing the market experiment.

For the experiment, Slack Investor uses a trend following (or momentum) system called the Directional Movement Index. The buy signal shows itself as a downward dip in the ADX (grey line) of the lower panel below. There are many ways of setting up this system. Slack Investor likes the “smoothing” that is enabled by a system that looks back over the previous 11 periods – but the complexities are best left for the Resources page.

*S&P 500 Weekly chart showing* a BUY signal on the Directional movement Index *weekly chart. The weekly price ranges are at the top and Average Directional Movement Index (ADX) patterns below – From* Incredible Charts

This month, there are positive movements all round. The ASX 200 +6.0%, the FTSE 100 +1.6% and the S&P 500 +8.0%.

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).

Keep On Course … and September 2022 – End of Month Update

Randall Reeves encounters a storm in the Indian Ocean in 2017 – Is this what the current stock market turmoil feels like?

Slack Investor loves finding out about remarkable achievements. He came across the inspiring story of Randall Reeves who set himself the task of doing a solo “figure of 8” circumnavigation around the Americas and the Antarctic. This 64 400 km trip encompassed both polar regions and was achieved solo, in the 14m boat “Moli”, in 384 days.

… he (Randall) hit a severe storm in the Indian Ocean. Waves were breaking 200’ (61m) to 300’ (91m) in each direction, and his boat got knocked down so intensely his mast was fully submerged, breaking a window in the pilot house and flooding his electronics.
Extract from The Figure 8 Voyage – Randall Reeves

Randall Reeves during his adventure, after his circuit of the Antarctic and back to Cape Horn for the second time!.

I mention Randall Reeves achievements as he set himself a difficult challenge, that no one had achieved before, and succeeded on his second attempt. All we investors have to do, is pick a course to financial independence – and just keep going. Our boat might suffer a few perils along the way …. but we trust that it is a sound vessel – and it will get us home.

Bear Markets

Downturns aren’t rare events: Typical investors, in all markets, will endure many of them during their lifetime.
Vanguard, 2022

Slack Investor can speak with some experience here, as I have been an investor through all of the above bear markets … and they are never any fun! But, I have learned that … they all pass – and the stock market recovers, and always reaches new highs. The sometimes frustration of just “holding on” to your shares in a falling market must be weighed against the stresses of trying to time the market.

Keep on Course

Slack Investor has had mixed success in his timing the market experiment. The experiment is limited to index funds (Less than 3% of my Portfolio) and will run for another 2 years to make it a 20-year trial.

At the end of September 2022, my Index Timing strategy has outperformed the Australian Index (+1.4% p.a.) and the UK Index(+1.9% p.a.), but underperformed the US Index (-0.3% p.a.). My current feeling is that when considering that “time out of the market” means a loss of dividends, it is not worth the stress and effort and I will probably abandon the experiment in 2024 – after a 20-yr trial. The bulk (97%) of my Investments portfolio is run with the strategy of trying to buy good companies that are growing, tinkering a little, but generally just holding on!

The world MCSI AC Index is dominated by US companies (61.3%). The current 2022 World MCSI ACWI bear market is not shown in the above chart. Also, there is some argument whether the 2020 “Covid Crash” qualifies under the generally accepted definition of a Bear Market – a decline of 20%, or over, that lasts at least 2 months.

We humans naturally feel the need to do something when we see our investments fall in value. Slack Investor does not know if the worst is over, probably not! Slack Investor does know that, if you can avoid it, it is generally not a good idea to get rid of your risk-exposed assets during times of downturns – you are selling your assets cheaply in these times.

Vanguard have (below) kindly extracted the Bull markets (shaded in green) from the Bear markets (shaded in brown) for the MSCI All Country World Index since 1980 prior to January 2022. The Bull’s prevail and these pesky Bear markets will eventually pass – This chart is reassuring.

The Bull (shaded in green) and the Bear markets (shaded in brown) for the MSCI AC World Index since 1980. The gains/losses are expressed in percentage terms. – Vanguard

The World Index (MSCI AC), the S&P 500, the Dow Jones Industrial Average, and the Nasdaq are now in a bear market, and the S&P 500 has closed at a new 2022 low.

We might not be on a solo circumnavigation through dangerous waters … but the lesson here is to prevail. Tighten the belt if you have to, you have a plan! Endure the situation and try to distract yourself from the stock market with life’s enjoyable things.

The stock markets will do what they always have done, oscillate between over-priced to under-priced. The long-term gains provided by holding shares are well established. If you are still working, your regular saving and investing will be buying lots of shares through dollar-cost-averaging.

If you are retired, in these tough times, you have your stable income pile to help with your living expenses. There will be better times.

September 2022 – End of Month Update

Despite the above discussion, my small scale market timing experiment continues. Slack Investor is on SELL ALERT for Australian index shares (ASX 200), the US Index (S&P 500) and the UK Index (FTSE 100).

I have a “soft sell” approach when I gauge that the market is not too overvalued. I will not sell against the overall trend but monitor my index funds on a weekly basis once the monthly stop loss has been triggered.

All my followed Index funds have fallen below their stop loss values. Big monthly falls for the ASX 200 (-7.3%), S&P 500 (-9.4%), and the FTSE 100 (-4.1)%. Time for some distraction from the market carnage. There will be better times.

All Index pages and charts have been updated to reflect the monthly changes – ASX Index, UK Index, US Index. The quarterly updates to the Slack Portfolio have also been recalculated.