Position Cost Averaging

Hi PCA Fans,

I updated the model portfolio recently and got a barrage of selling. As I expect the market to roll over a bit here and possibly for a while, I am updating the portfolio more often these days.

Today I opened it up and ran the quotes to discover another round of selling.

I will take this round of sell orders as well because I will want the cash on hand to buy back in at lower prices.

Here are the orders for the model portfolio.

In the Indices portfolio I am getting sell orders on SPY, 14 shares for 1,456.28

The QQQQ holding is saying hold and I will.

The IWM says sell 17 shares for 1,003.68.

The DIA is selling 10 shares for a total of 959.70

The Sector Portfolio is selling off a bit as well… here are the orders.

GDX is selling 15 shares for a total of 668.40.

SMH is selling 14 shares for a total of 345.66.

XLE is selling 9 shares for 478.08.

The commodities are all holding and we sold the entire QLD position as it was a bad idea to begin with.

Total portfolio picture is this…

We started with a portfolio value of 472,613 and now we have a portfolio value of 471,728 so we are down a mere 885 bucks or 0.2%.

That is not bad at all when you consider the prices of our initial purchases way back in August of 2008. The market had not really fallen apart yet and the collapse provided the buying opportunities to load up the portfolio.

We’ll see what happens going forward and since we have about a 25% cash reserve available we may get a chance to deploy more cash should we get considerable weakness from here.

With 75% of the portfolio invested, we could also get a chance to lock in more gains if the market pushes higher.

The beauty of the PCA strategy is having a plan in place no matter what.

Until next time…

Buy from the scared… sell to the greedy with PCA.

Hi PCA Fans,

I am selling 11 shares of XLE for 571.67.

We are now sitting at 87.3% shares and 12.7% cash on this one.

14 buys and 1 sell have us down by 10.6%

Another wait and see holding.

Hi PCA Fans,

I am selling 82 shares of SMH for 2,002.44.

After 15 buys and 1 sell we are still down 2.3% and we have lowered our cost per share to 25.10 from 30.44.

So far so good.

Hi PCA Fans,

I am selling 44 shares of GDX from the model portfolio for 1,881.44.

This holding has had 10 buy orders and 5 sell orders. We are showing a profit of 43% and we are sitting at 59% shares and 41% cash.

Hi PCA Fans,

We started the model portfolio back in August and the markets have completely fallen apart since then.

Overall the model portfolio is only down about 24.9% because we had the cash cushion to help absorb the losses.

We have had a bunch of buy orders as the markets collapsed and I am very glad we are using ETFs instead of stocks.

3 of our positions are "out of cash" and I may decide to add some more if I could be convinced that we have actually seen the bottom.

We still have some buying power, and It may be a while before I deploy any more cash into the positions.

Only time will tell.

We would love to scoop up some real bargains and so I will try and keep some powder dry.

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