RESULTS POSTED for July

I am very happy with performance this month.  Good outperformance vs the benchmark, this despite being significantly underweighted in equities toward the end of the month.  Check it out!  Month end weights are 27% equity, 22% credit and the rest in cash.



The well received news of Euro support is having a nice effect on US equities.  I am not so sanguine.

Today's comments by Bill Gross

http://www.pimco.com/EN/Insights/Pages/Cult-Figures.aspx

I think are spot on for the long term view on equity.  I would agree that it is not sustainable for stocks to grow at 3% real return over GDP.  However, I have never been in the camp to expect those kind of returns.  I think if your retirement can survive with a 2% real return in absolute value, you will be ok.  That is a bit of a trick though as most people's funds won't last at those return levels.

I would agree with Mr. Gross that bonds cannot help us at their current prices.  TIPS with negative or just barely positive real returns just won't get the job done.  I would say though that I believe equities will help.  Having a portfolio of dividend paying stocks that have some pricing power KO, KMB, PG, MRK will have a beneficial effect on your portfolio.  They are not as cheap as they were, but still worth owning.  Keep an eye out for drops in the market for opportunities to add to those types of stocks.

Right now, I have trimmed almost all speculative positions and am down to about 26% equity exposure.  Definitely on the low side and I believe there will be opportunities to buy stocks at better levels.  I am not a big level believer but watch when the "good news" stops having good effects and peters out.   Likewise, buy when the bad news is being discounted.