The Plant/Wait/Harvest designations are part of "Strategy Two" described in the section below and in the video at the end of this section.
IMPORTANT NOTE:
The strategies discussed below are for the timing of your relatively infrequent contributions and distributions to and from your accounts invested in the stock market. The strategies are not to be confused with trades that we will make among the ETFs of the model portfolio throughout the year. For most of your time using Focused 15 Investing, the strategies below will not be needed.
As an example of contributions and distributions, those in their early careers making major contributions to their retirement accounts should consider these strategies for determining when to invest those contributions. For retirees, the strategies can be considered when you need to take money out of your account (distributions) for living expenses.
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Although we know that we should buy low, many people become interested in the stock market after it has appreciated dramatically. Thus, they are more likely to put money into the stock market near the peak of a price cycle.
While the Focused 15 Investing portfolios seek to avoid losses, we don't avoid them completely. This post lists strategies for moving money into the ETF model portfolio you have selected from the Focused 15 Investing publication. These strategies can help you avoid putting all your money in the ETFs at the top of a meaningful stock price cycle.
Likewise, there is a tendency to sell after major decline to reduce any additional pain of falling stock prices. These strategies can help you avoid taking money out of your retirement account (distribution) at low points, or bottoms, of meaningful cycles.
Assume you plan to invest $10,000 into an account that you will trade tracking a Focused 15 Investing portfolio. Put the $10,000 into your account, and then use one of the following strategies for investing all of that $10,000.
Strategy One: One-Third Every Three Weeks (Moving In or Out)
- For the trades for the first Friday, enter in "Box #2 Cash" on the Shares-to-Trade worksheet 66%. The worksheet will then allocate 33% of your $10,000 to the ETFs in the model portfolio you have selected.
- Three weeks later, change the amount in Box #2 Cash to 33%. This will allocate the next one-third of your money to the ETFs.
- Three weeks after that, change the amount in Box #2 Cash to 3%. This will invest the next roughly one-third of your account. It also leaves a cash buffer in your account, which I suggest should be roughly 2 to 3%.
- When you want to take money out of your accounts, you can increase the allocation to Box #2 Cash to sell your ETFs. You can sell the appropriate number of shares of ETFs over a period of time.
Strategy Two: Money Moving Seasons (Moving In or Out)
I indicate three different "seasons" for moving money based largely on the Micro Market Resilience Index (MRI) cycle. The seasons are Plant, Wait, and Harvest.
- Plant - This is when the Micro MRI is low in its cycle and likely to move higher. It is a good time to move money into the model portfolio, if needed. During a Plant season, hold off taking money out, if practical.
- Wait - Hold off moving money in or out. This is a time to prepare for the next Plant or Harvest season, if needed.
- Harvest - This is when the Micro MRI is high in its cycle and likely to move lower. It is a good time to move money out of the model portfolio, if needed. During a Harvest season, hold off putting money in, if practical.
These are also discussed in the video at the end of this section.
Strategy Three: Hybrid
For moving money in, move one-half of your money into the model portfolio in each of two Plant seasons. Since there are roughly two Plant seasons a year, this strategy takes the longest to fully invest the desired amount.
For moving money out, move one-half of your money out of the model portfolio in each of two Harvest seasons. Since there are roughly two Harvest seasons a year, this strategy takes the longest to fully invest the desired amount.
Please see this video for a general discussion of the Plant/Wait/Harvest seasons.
