11/4/2010 Historical Post

From: Dale Beals <dpbeals@comcast.net>
Subject: Hedges coming off
Date: November 4, 2010 3:53:14 PM CDT

Hey everyone… yesterday’s move by the Fed started a tidal wave today that may run for awhile… good for stock holders… so this morning, when it was clear the market would be strong, I removed most of the hedges, which reduce both up and down movement in portfolios. Unless there’s a big reversal, I plan to remove the rest of the hedges by the end of next week.

Then we’ll be back to your normal portfolio allocation. Those of you who watch the markets closely may realize how close we came to another “flash crash” yesterday. Initially, just after the Fed announcement, the market went up, then plunged nearly 1.5% in 5-10 minutes before reversing in the next 30 minutes or so to eventually show a modest gain for the day. I was very happy the hedged were in place.
Folks who don’t watch the markets closely may wonder why I’m so cautious around big events like the elections or this particular Fed announcement. The reason is that we are in uncharted skies as far as the financial markets are concerned. Autopilot is fine for flying in clear weather, but you want a pilot at the controls when the air gets turbulent. In a week, you may (hopefully) unbuckle your seat-belts and feel free to move about the cabin.
Thanks for letting me serve you,