Help, I'm getting a nosebleed!
Like a roller-coaster that takes you higher and higher, it's fun to anticipate the drop ahead but now we're running out of oxygen at these levels (and yes, we're shorting again) as the Russell challenges 1,200 again and the Dow, S&P and Nasdaq come close to their highs yet again.
Click on picture to enlarge
Fortunately, this was all foreseen this week and we sold a lot of our shorts in our Short-Term Portfolio on Tuesday's dip and now it's our bullish Long-Term Portfolio that's zooming along with the markets, adding $35,000 this week, all the way to $590,375 (up 18.1% for the year) at yesterday's close. Our STP dropped to $175,711 (up 75.7%) but that's a combined $766,086 – a new years high (up 27%) for our combined virtual portfolios – just in time to end the year, too!
This is very much in line with our “Get Rich Slowly” strategy we discussed over the weekend as we're well outpacing our 20% goal in all four of our Member Portfolios. As you can see on the chart, getting consistent returns of 20% or more puts you on a path for exceptional portfolio growth and the key to getting there is to follow Warren Buffet's Rule #1: “Don't lose money!”
That's why we run our Yin and Yang strategy on our two main portfolios. The $500,000 Long-Term Portfolio is generally all bullish (given our long-term bullish outlook) and we offset/hedge those bets with a generally bearish Short-Term Portfolio. That allows us to maintain our long-term positions when there are market dips, like we just had, without having to panic in and out of positions that are designed, for the most part, to take advantage of time decay using our “Be the House – Not the Gambler” strategy that has been our theme for 2014.
Our long-term outlook remains bullish and short-term, we still expect a sell-off no later than January earnings (very disappointing overseas revenues, energy sector collapse, low retail sales) and we began adding back short positions to our Short-Term Portfolio to lock in our Long-Term gains and lean a little more bearish into today's Quad-Witching event.
