Stock Market Moves for Summer 2015


I’m a pretty conservative investor overall.  I tend toward low cost index funds and have a relatively conservative weighting toward cash, bonds & real estate. My goal is to preserve what I have more than grow it aggressively and take on added risk. 

That said, I tend to pay a lot of attention to the stock market.  It’s on the news every night and easily tracked.   In fact, nearly half of our equities holdings are wrapped up in a single MegaCorp stock – where I worked for many years and accrued substantial stock options.  

In their new July 2015 issue (which I read on vacation using my library’s free app), Kiplinger’s included their mid-year report on the stock market and offered advice on three moves to make right now. 

Overall, they felt that the market looked “fully valued” to a little overpriced.  The S&P500 is sitting at an 18 forward-looking PE, versus a historical 15 average.  They expect mid-single digit returns annually over the next 5 years – and that includes dividends.  The market stands about a third higher today than the pre-recession high and getting significant growth will be difficult, especially since we are 7 years into this bear market and the Fed is inching closer to interest rate hikes. 

Nonetheless, here are the three tips they have for equities investors right now and where I am likely headed:

1.  TRIM YOUR STOCK HOLDINGS – They don’t suggest dumping your stock holdings, but dialing them back by 10-15% points.  If you have 70% of your money in stock, cut it to 60% for instance. Our stock holdings are on the lower end already, although I will continue to sell off stock options to build our cash reserves until our FIRE escape date arrives in 9 months. 

2.  DIVERSIFY WIDELY – Of all stock markets, the US markets tend to be priced a little higher, relative to earnings.  They suggest Europe and Japan as opportunities.  I’m going to look at our mix of domestic and international funds.  I think we’re in a good place, but I’m hearing more & more about economic recovery outside the US that I would like to be well positioned for.

3.  HEDGE YOUR BETS – They suggest looking at funds that short the S&P500 as a way to benefit from downside risk. I don’t think I’m a sophisticated enough investor to understand how to leverage these investment approaches.  We’re meeting with our financial advisor soon and I’ll ask him about them. 

How do you feel about the market and where are you headed?

Image Credit: Kiplinger’s

3 thoughts on “Stock Market Moves for Summer 2015

  1. I know that you’re anonymous for a reason but do you ever think that you’ll be revealing yourself after retirement, we’re all dying to know who megacorp is? haha!


    1. Yes – a full reveal is definitely planned. 😀 A good company, that will be well known to all – but not unlike a lot of other Megacorps in terms of corporate bureaucracy.


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