It is that time of the month when I take a look at my 401K choices and run my Metastock software through its monthly algorithm and decide whether to keep the same choices or make changes. This month I see that the results are mixed; suggesting a transition taking place.
I have two 401K plans to look through. One is the current company and the other belongs to a previous company. Both are with Fidelity. In the first one it is a tussle between Bond funds and Vanguard Explorer Admiral and Artisan Mid-Cap Value. The other is between Fidelity Govt Income and a Mid-cap fund and Spartan 500. That means I will turn my cash funds into equity based on about 40% of my 401K. I am going less than 50% as my slower weekly technical charts on each of the equity funds are still showing down signals. The only up signals are still from Fidelity Govt income and bond funds. Although I see that the daily chart on Fidelity Govt Income has turned in a down signal.
Therein lays the problem with technical analysis. If you look hard enough, you will always find a reason to do nothing – and with all the analysis, stay frozen - analysis paralysis. When the signals are all tuned together, it is usually too late. It is best to weigh the trading systems but have a trading plan to follow consistently without muddying the waters with additional analysis. There is plenty of uncertainty out there but I feel it is appropriate for me to dip my feet into the 401K equity funds now.
This is a change from previously being in money market, cash and Fidelity Govt Income funds only and no equity funds. I am also modestly into GLD (gold ETF) in my R/IRA fund based on my last week’s post.
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