CPM Investing LLC - Investment Publications
The section is intended for people A) seeking to move money to more aggressive model portfolios than they have been using or are making contributions to their accounts tracking Focused 15 Investing, and for those B) withdrawing money (taking distributions during retirement, for example).
A) For Those Moving to More Aggressive Model Portfolios or Making Contributions to Accounts
In the video linked below, I describe two ways of deciding when and how to move money. The first way is to move money in all at once. This is appropriate when the money you are moving has already been invested in the stock market. When this is the case, you are already experiencing the various cycles of performance and the move to a Focused 15 Investing model portfolio will simply provide better return for the variability you are already accustomed to.
The second way is to move portions of your money according to a regular calendar interval (e.g., 1/3 every three weeks, 1/4 every four weeks). I'll discuss this more below. The method you select is up to you.
Move Money in Gradually
Those just beginning to invest in the stock market who have had their money in cash-like investments (e.g., a bank account with minimal return and minimal variability) tend to be sensitive to initial losses. Therefore, I provide information that may be helpful making a smooth transition to more aggressive investments. The Plant/Prepare/Harvest designations are shown on the detail page of the newsletter for your chosen model portfolio. These are based on where the stock market is in its various cycles of resilience, focusing especially on the Micro MRI.
The Plant/Prepare/Harvest season designations may help you put money into the stock market when the MRI cycles are likely poised to move higher thereby reducing the chances of initial losses. Please see the video below for a discussion.
Note that I recently changed the name of the “Wait” season to “Prepare” to remind people to set up accounts and get familiar with trading prior to a Plant season. Plant seasons are short, and there is often not enough time to set up accounts, get familiar with trading, and actually invest money during a single Plant season. It is probably best to begin trading in the prior Prepare season and simply hold a high level of cash in your account. This can be done by setting the amount in box 2 on the Shares-to-Trade worksheet to 90% or 80% during a Prepare season.
B) For Those Planning to Take Money from their Retirement Accounts…
If you are planning to take money out of your retirement account over the next 3 to 4 months, watch for the Harvest designation. This time will be a good time to take money out of the stock market.
Please keep in mind that the rules driving money-moving seasons are not as strong and reliable as the algorithms driving the target weights in the model portfolios. If they were, they would be included in the algorithms.
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