The Way Of The Bull And The Bear | Seeking Alpha

The Way Of The Bull And The Bear | Seeking Alpha



Eric Parnell has written another great article about how we need to have a good investment plan for these uncertain times.  I agree with Eric completely that sometimes we need to be bullish, and at other times we need to be bearish.  His stock allocations reflect his plan.



Eric is short term bullish, and he holds two stocks that are safe under current market conditions in addition to being reasonably profitable.  SPLV, the S&P 500 low volatility ETF, has gained 16.7% from its low of the last 12 months, and the dividend is 2.3%.  If you bought the stock near one of its low points, you could have gained 15 to 19% in the last year counting the dividend.



Another bull pick from Eric is XLU, the utilities ETF.  You could have made 22% during the past year just from capital gains if you had bought it at $36 per share.  Then, you would have made at least 3% from dividends in addition to the stock price gain.  How many 25% stocks do you hold?  I agree with Mr. Parnell that these two stocks are excellent picks.  As for picking the bottoms or breakouts of stocks, this is where a knowledge of charting will help.  As for the fundamentals of these two stocks, you don't have to worry about that aspect unless we are going through a severe bear market.



Next, Eric is intermediate term bearish.  In other words, he has his eyes on the market exits.  He has also allocated some of his money to cash and bearish stocks to pay up on his bear insurance.  For example, he owns TLT, the 20+ year treasury bond ETF, because it will certainly go up when the market goes down.  I own TMF myself because it is a 3x ETF version of TLT.  So, both Eric and I are allocated for the bear whenever it finally arrives.  We can also add to our bearish stocks at the proper time.



Finally, Eric is a long term bull.  He is looking forward to buying bargain stocks the next time stocks hit the bottom.  We don't know when this will happen, but both of us will be ready for bottom fishing in the future.  Some of the greatest gains you will ever achieve will come from picking good stocks as a bear market turns into the next bull.  The bottom line is that we need to be accumulating money all the time in spite of market conditions so that we will have the retirement dream that we are expecting.