My Investment Journey Since 2010 And Where I Am Now

The Main Focus Is:

• Reviewing the market and my trading.
• Updating the current Uptrend.
• My Pledge to long-term investors.

The Market Over Fourteen Years (2009 – 23)

Day and night, my thought focused on 1) during Covid-19, the Russia-Ukraine (R-U) War, and inflation (2020 – 23), and 2) the prior era of the case 1 since Great Recession, roughly (2009 – 19). Both periods witnessed as a never-charted but economic policy and the government reactions clearly differed.

In the latter period, Ben Bernanke, then Chairman of Federal Reserve System [FED] who delivered quickly and sufficiently to help the shocked U.S. economy and the remaining global economy from the frozen global-credit market due to the default of the U.S. mortgage-backed derivatives.

In the former period, however, the government sent the Covid-19-Relief checks several times, without any consult with Fed. This abrupt fiscal stimulus impacted the U.S. economy badly. Fed was forced to try to mop the excess liquidity in the economy, by selling Treasuries.

Treasury selling of Fed pushed interest rate higher, and, in turn, it dampened economy, and also, it’s the main factor for the prices of Treasuries had slumped in the entire two years (2021 – 22), so, as a result, many fixed-income investors suffered.

The Great Recession [GR] (2007-09) was the severest one since Great Depression. The unprecedented, courageous Fed’s actions made GR turned to be recovered in a relatively short period. The U.S. market hit a bottom on March 09, 2009, and the current Super Bull was born. As a consequence, Dr. Bernanke was awarded the Nobel Prize in Economics for his novel way to encounter GR.

On the other hand, the Covid-19 Recession [CR] was a deepest and shortest. The National Bureau of Economic Research (NBER) declared that CR was just two months, March and April 2020. It was really a clear exception to date a recession with such an extremely short period.

The business trough was a very-sharp V shape, in other words, the deep plunge of production and income was recovered very rapidly, but Inflation remained in a pretty high level, and has not slowed down in 2021 – 22.

The Historical Record of the Super Bull Market

The current Bull Market, started on March 09, 2009, has run for fourteen years (one month short), as of Friday (February 10, 2023), gaining 507% (five times+) from 676.53 to 4,096.46.

Our dear Bull is alive at this moment. The Bull (which represented by SPY) moves ahead with still strong leg and with the resilient U.S. Economy, hand in hand, as described by the following excellent quote:

“This process of an increased reliance on financial asset appreciation as nearly the only means to generate wealth has left much of the developed world in a situation where the economy is now closely tied to the growth in financial assets.” (From “The Stock Market And The U.S. Market…”)

The long journey of our Bull has not been smooth at all. The critical moment was the following.

Did our Dear Bull surrender during the short session on the Christmas Eve 12/24/2018 (Monday)?

On Christmas eve (Monday) the market closed at early afternoon, 1:00 p.m. The market started by declining for about an hour. At 11:25, the decrease was resumed and accelerated until 12.45. That was really one-way free fall.

That time, Nasdaq went into more down from a -1.95 to a -3.2%, and S&P 500 and Dow were gloating above the bear surface by a 0.5% and a 1.7%, respectively, following the strong lead of Nasdaq.

The almost 10-years saga, our record bull is dying.

Suddenly an alert came along about the interview of John Williams, Vice Chair of FOMC, President of NY Fed, and former President of San Francisco Fed, and one of the major designers of Fed Forecasting Models, and the market just turning up again as soon as his talk started.

Then I switched screen right before 1:00 for the market closing report, which were a little more fall for Nasdaq, and small gains for both S&P 500 and Dow. The last row of the table was popped, showing a 0.4% for S&P 500, a 1.2% for Dow, and a -3.6% for Nasdaq.

The magic number, a -19.9% for S&P 500, appeared on the second row from the bottom very proudly, as exactly it did in 2011, seven years ago. The number was just shy of the official number, -20%. The most accepted criteria of a bull or a bear are 20% increase or a -20% decrease in broad market. “A Bear? Or A Bull?…” set up the criteria.

How have investors done in these two distinguishable periods: 1) 2009 – 19, and 2) 2020 – 22?

They extremely well performed in the first period while in the second period, they pretty much underperformed, or the performance was mediocre at best because they never adjusted their investing positions properly for the Covid-19, Inflation, and the R-U War environment.

Both periods have been never before. Then what would be the main reasons for somewhat polar cases: North (or Success) vs. South (or failure)?

First, the economic policy for both was accommodating, but the former was a well-prepared monetary policy, executed by Fed, while the latter was an abrupt fiscal stimulus, without considering ensuing problems such as persistent inflation pressure.

Second, albeit GR caused by the defaulted mortgage derivatives, it didn’t have inflation problems, but CR has hatched a sticky inflation which hijacked the market in 2021- 22.

The Review of My Investing 2010 – 20

In my sufficient time on the hospital bed, I pondered thoroughly, summarizing the following takeaways:

• My investing performance for eleven years (2010 – 20) wouldn’t be better. I maximized our retirement money somewhat sufficiently.

In retrospect, however, I’ll adjust:

• In 2021 – 22, Inflation, Covid-19, and the R-U War had dragged my holdings such as Vanguard ETFs, and other big Tech and dividend stocks over longer than two years under water. Most quality equities are not far below their costs, considering dividend they paid.
• Although the possibility for the bad two years (2021 – 22) to repeat would be very slim, I’ll refrain from pursuing extra gains at the last legs of stiff upswings.
• Also, I’ll add more quality dividend stocks in my radar.

Still in Uptrend?

Yes, indeed, according to the verdict of Table 1: “m” and “P” were even on 1 and 3. “m” had an edge on 2. But P had a big edge on 4 and 5.

1. The total “m” and “P” were 19 and 18, respectively, out of 37 days (12/16/22 – 02/10/23). <EVEN>
2. 2M and 2P were 6 and 3, respectively. <m had EDGE>
3. 3M and 3P were only one each; 01/17, 01/18, and 01/19 for 3M. 01/31, 02/01, and 02/02 for 3P. <EVEN>
4. 4P: 01/10, 01/11, 01/12, and 01/13. <P had BIG EDGE>
5. Friday “m” and Friday “P” were 3 and 6, respectively, out of 9. <P had BIG EDGE>

As a result, four months (sixteen weeks) Uptrend has been strongly going forward.

Click to enlarge

The Pencil and Paper Only [PPO] Approach

I introduced the PPO Approach several months ago. The previous section illustrated how to confirm the current Uptrend started four months ago. The new details were demonstrated to do it.

The PPO Approach is applicable not only to track the momentum/trend in the volatile market, but also all other areas related to major macroeconomic variables such as business cycles, inflation, Market-Turning Points, Treasury yields, Treasury Yield Curve, and so forth.

All you have to do is pick relevant market data from the Wall Street Journal or Yahoo Finance, and update the series every day. Calculate changes or % change with a hand calculator. No doubt you will find some valuable results which other sophisticated computer programs or charting methods or delicate moving-average skills fail to catch.

The Concluding Remark

If you’re a do-it-yourself long-run (5 years or longer) investor with a couple of well-diversified (ETF) Portfolios, believing my approach, please don’t decamp on the bull ground when a bear market (or even a severe BEAR market like the one we experienced after the financial turmoil in 2007 – 09) would start.

Believing my pledge, if you will stay your course, you will finally end up with huge financial gains that should be far much bigger than you can imagine.