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Thursday, June 5, 2008

Market Guidance Not Accounted for in Brinker's Model Portfolios

On Moneytalk, Bob Brinker often brags about his "buying opportunities." Let's take a look at how he has done over the past 4+ years since his Model Portfolios returned to 100% invested.
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We know that he recommended that investors dollar cost average new money into the stock market (up to his recommended 35% holdings) during the whole cyclical bear between 2000 -2002. Matter of fact, I am not aware of any time that he ever recommended NOT dollar cost averaging into the stock market.
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Bob Brinker's "buying opportunities" are defined as an S&P 500 Index level at which he considers the stock market “attractive for purchase” for all new money. He occasionally refers to them as "gifthorses."
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There are times when he will recommend that investors take only a "dollar cost average approach" while he looks for a new S&P level that he considers "attractive for purchase."
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April, 2003, (S&P: 858.47) Brinker's "attractive for purchase" buy-level was "780 to 810 range" or below.
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June, 2003, (S&P: 967) Brinker was warning subscribers not to chase rallies and to even consider "personal risk tolerance" when dollar-cost-averaging.
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By November, 2003 (S&P: 1059), Brinker's buy-level of 780-810 was lost in the dust and he was strongly recommending only "gradual" dollar-cost-averaging new money into the market.
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June, 2004, (S&P: 1121.20) Attractive-for-purchase on "dips below the 1100 level of the Standard and Poor's 500 Index."
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December, 2004, (S&P: 1191.17): Dollar-cost-average only.
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April, 2005, (S&P: 1172.92) Attractive for purchase at the 1120 level.
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May, 2005, (S&P: 1156.85) Attractive for purchase at the 1160 level.
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September, 2005, (S&P: 1220.33) Attractive for purchase "below the 1180 level."
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July, 2006, (S&P: 1280.19) Attractive for purchase at 1250 level or lower.

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December, 2006, (S&P: 1400) Dollar cost average only.

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April, 2007 (S&P500 1424.55) Attractive for purchase at 1380 or lower.

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June, 2007 (S&P: 1530.62) Dollar cost average only.

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August, 2007 (S&P: 1455.27) Attractive for purchase mid-1400's.
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January 4, 2008 (S&P: 1468.36) Brinker said: "We continue to rate the market attractive for purchase on any weakness into the S&P 500 Index mid-1400's range."
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January 20, 2008 (S&P: 1310) Dollar cost average only.
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February 10, 2008 (1331) Attractive for purchase at low-1300's
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