{"id":91134,"date":"2016-06-10T10:00:22","date_gmt":"2016-06-10T14:00:22","guid":{"rendered":"http:\/\/countingpips.com\/?p=91134"},"modified":"2016-06-10T07:00:59","modified_gmt":"2016-06-10T11:00:59","slug":"get-ready-for-the-second-half-of-2016","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2016\/06\/get-ready-for-the-second-half-of-2016\/","title":{"rendered":"Get Ready for the Second Half of 2016"},"content":{"rendered":"
June 10, 2016<\/div>
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By WallStreetDaily.com<\/u><\/a> \"Get<\/p>\n

Thus far, 2016 has been an absolute rollercoaster ride of market ups and downs for investors.<\/p>\n

In January, the talking heads foretold recession.<\/p>\n

Now, the S&P 500 is on the verge of setting a new all-time high, oil<\/a> has closed above $50 for the first time since last July, and thanks to the sinking U.S. dollar, gold may actually breach the $1,300 barrier this month.<\/p>\n

But as stocks approach overbought levels, can the good times last? And more importantly, where do we go from here?<\/p>\n

While I won\u2019t pretend to know exactly what the future holds, here are three ways to prepare your portfolio<\/a> for whatever lies ahead\u2026<\/p>

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1. Take Some Money Off the Table<\/h2>\n

If you were brave enough to buy dips in stocks at the January and February levels, you\u2019ve likely been rewarded with some handsome gains.<\/p>\n

And if you\u2019re one of these fortunate folks, you might consider booking some profits and raising some \u201cdry powder.\u201d<\/p>\n

Longtime readers know that I don\u2019t put much stock in the \u201cSell in May and Go Away\u201d adage.<\/p>\n

But I do encourage keeping cash on hand to take advantage of opportunities as they present themselves.<\/p>\n

And history is telling us to expect one such window to open up soon\u2026<\/p>\n

Over the last 10 years, the S&P 500 Index has averaged a decline of 1.31% during the month of June, excluding dividends. And June\u2019s losses are back-loaded in the second half.<\/p>\n

From June 16 to June 30 in the last 10 years, the large-cap index has fallen 0.91% on average versus a 0.28% decline in the first half of the month.<\/p>\n

Fast-forward to the July medians, when the index gained 1.13% on average since 2005, and the verdict is clear: It\u2019s time to free up some capital for the end-of-June \u201cstock sale.\u201d<\/p>\n

2. Load Up Your Watch List<\/h2>\n

Louis Pasteur once famously said, \u201cChance only favors the prepared mind.\u201d<\/p>\n

In the context of investing, the better prepared you are ahead of buying opportunities, the more successful you\u2019re bound to be.<\/p>\n

I always encourage investors to keep an up-to-date watch list of at least 10 to 15 stocks, across multiple sectors, at all times. So when the market dips, you\u2019re already in a position to strike.<\/p>\n

As a chartist, I primarily use a stock\u2019s chart to guide my entries and price targets for trades.<\/p>\n

But if you\u2019re a fundamental investor, then you should know your target stocks\u2019 historical valuations inside and out.<\/p>\n

This way, you know what a deal actually looks like on a stock, from a value perspective.<\/p>\n

Take, for instance, Apple Inc.<\/strong> (AAPL<\/a>).<\/p>\n

After several years of rip-roaring gains, Apple\u2019s stock has declined 23% in the last year, and its price-to-earnings ratio fell below its five-year average in late 2015.<\/p>\n

In fact, Apple\u2019s price-to-earnings ratio fell last month to a three-year low. It\u2019s trading at a discount to its five-year price-to-book and price-to-sales ratios, too.<\/p>\n

This is the kind of sale for which you\u2019ll want to keep an eye out.<\/p>\n

And when the market falls broadly \u2013 like it soon may \u2013 many brand-name stocks will be suddenly marked down.<\/p>\n

Now is the time to get these stocks in your sights while the market\u2019s calm.<\/p>\n

3. Be Patient<\/h2>\n

Finally, with cash on hand, and a watch list ready to go\u2026 sit back, relax, and let the market come to you.<\/p>\n

Some investors will tell you that you can\u2019t time the market and while it\u2019s nearly impossible to predict market bottoms or tops, you can<\/em> increase the profitability of your short-term trades by following momentum.<\/p>\n

And as I\u2019ve previously mentioned, stocks are approaching super-heated conditions.<\/p>\n

The S&P 500\u2019s 14-day relative strength index currently reads 65.8 out of 100, less than five basis points shy of the overbought threshold. And the small-cap Russell 2000 Index is already overbought.<\/p>\n

Breadth \u2013 or overall market strength \u2013 remains strong enough to keep forward progress moving over the next few months.<\/p>\n

But with near-term momentum topping out, consider letting the market cool off a bit before getting aggressively long.<\/p>\n

Follow these three steps and your portfolio may very well reward you with profits \u2013 and much sooner rather than later.<\/p>\n

On the hunt,<\/p>\n

Jonathan Rodriguez<\/p>\n

The post Get Ready for the Second Half of 2016<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

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By WallStreetDaily.com Thus far, 2016 has been an absolute rollercoaster ride of market ups and downs for investors. In January, the talking heads foretold recession. Now, the S&P 500 is on the verge of setting a new all-time high, oil has closed above $50 for the first time since last July, and thanks to the […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-91134","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/91134","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=91134"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/91134\/revisions"}],"predecessor-version":[{"id":91157,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/91134\/revisions\/91157"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=91134"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=91134"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=91134"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}