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August 6 Market Update - July 31st Advice
Bob Brinker's Recent Advice to not Sell

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July 31, 2011 Moneytalk Summary with Editorial Comment ("EC") by Kirk Lindstrom

July 31, 2011 Moneytalk Update:

Bob Brinker remains fully invested Last Sunday, July 31, 2011, Bob Brinker said it was amazing how the stock market had taken all of the debate over the debt ceiling in stride.  He said the S&P 500 was "setting about 5% below its closing high for the year, which is truly amazing."   

EC: The closing high for the year for the S&P500 is $1,363,61 on April 29, 2011.  You can move your mouse along this S&P500 chart to read the closing highs by date.  Friday the market closed at 1199 (See Market Update below) for a decline of 12.0% from the April 29 closing high.

Bob Brinker's Marketimer newsletter portfolios #1 and #2 have been 100% equities (fully invested) since March 2003.  See Bob Brinker's Asset Allocation History

Bob Brinker said that back in June, there was a caller who asked him if he should get out of the market when it was at 1270 to wait for the dust to settle over this debt ceiling issue.  Brinker said the market was at 1292 and if that individual had sold out, he would now be faced with either sitting and waiting it out or buying it at higher levels.  Bob said he was taking advantage of dollar cost averaging weakness lately and in fact bought some more into the market on Friday (July 29, 2011).

Of course, the market is now at 1292, a couple of percent higher than when that call came in at the end of June. So this is what happens. If that individual would have sold out at 1270 at that time, he would be faced now with either sitting it out or re-entering at a higher level.
Bob Brinker went on to say he was not part of the "panic crowd" and said he has repeated over and over all summer that he did not believe the US would default on its debt obligations and this is exactly how it looks like it will work out.

Historical Price Data for $SPX, the S&P 500 Large Cap Index
Day     Date       Open       High        Low      Close      Volume
=== =========== ========== ========== ========== ========== ===========
Fri 05-Aug-2011 1200.2800 1218.1100 1168.0900 1199.3800 6446630912
Thu 04-Aug-2011 1260.2300 1260.2300 1199.5400 1200.0700 5468922368
Wed 03-Aug-2011 1254.2500 1261.2000 1234.5600 1260.3400 4217014784
Tue 02-Aug-2011 1286.5600 1286.5600 1254.0300 1254.0500 4040342784
Mon 01-Aug-2011 1292.5900 1307.3800 1274.7300 1286.9400 3367536128
Fri 29-Jul-2011 1300.1200 1304.1600 1282.8600 1292.2800 3520111104
Fri 29-Apr-2011 1360.1400 1364.5600 1358.6900 1363.6100 3626909696

EC: I am sure glad I wasn't 100% in stocks like Bob Brinker.  I lowered my asset allocation to equities just before the market top and have made many buys since the market dropped below 1270.  I had an "auto buy" (limit order placed ahead of time) in my newsletter "explore portfolio" trigger Friday (8/5/11) for SPY at $117.  This is roughly 1170 for the S&P500 or 122 points lower than just last week's 1292! 
SPY is the exchange traded fund, ETF, for the S&P500:  SPY Charts and Quote

Click to view my BUY ALERT email (in pdf)
August 6, 2011 Market Update:

S&P 500 Intraday
S&P 500 Closing

Date of last bull market high 05/02/11
Date of last all time high 04/29/11
Last Market High 1,370.58
Last Market High 1,363.61
Date of last low 08/05/11
Date of last low 08/05/11
Intraday Low 1,168.09
Closing Low 1,199.38
Decline in Points 202.49
Decline in Points 164.23
Decline in % 14.8%
Decline in % 12.0%

S&P500 YTD with my "auto buy" level shown with a dashed blue line
S&P500 YTD

How to Get the Best CD Rates


Bob had on Vito Tanzi to discuss his book, "Government versus Markets: The Changing Economic Role of the State."

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