Tuesday, September 18, 2007


So, I started buying back into the market a little bit recently (mostly GE in late Aug and early Sept, as a long-term play). I stopped buying when I saw the market rally in advance of the Fed meeting. My current asset allocation is 38% cash, 36% real estate, and 26% stock.

I was hoping the Fed would disappoint today, causing a market dip and a buying opportunity. Instead the market shot up. However, I expect the excitement will be temporary. The economy should slip a bit more in the coming months, and the stock market will likely slip with it for a while.

I expect improving conditions later next year. This will give support to stock prices and also push treasury rates back up somewhat. So, while I may sell some stock in the current rally, before long I will increase my stock market exposure for the recovery. However, longer term (by 2010) I will push most of my money into real estate. I will fund this with cash and by substantially increasing my debt, without selling much of my stock.


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