Taking Profits

The nice little stock market rally that started in March is beginning to look a little tired - that, combined with the looming and historically ugly months of September and October, has prompted me to take a little off the table. I have sold PFF (recommended here) for a handy profit and closed half of a rather disappointing long-term position in ANR. I've also tightened up a trailing stop-loss order on the aggressive SSO.

I still like PFF and I'll be adding it back to the portfolio at some point in the future, but a better than 40% profit in four months just begs to be tucked away.

I'm a little over invested in the energy sector and the prospects for coal (ANR) aren't looking good over the near to intermediate term. Coal (black energy) is the antithesis to the currently popular and politically correct green energy.

SSO isn't a typical investment for a conservative investor but I like to use a small portion of the portfolio for trading. I generally switch between SSO and SDS using a 5%-7% trailing stop-loss order. I base the trades on simple technical analysis. More often than not, this portion of the portfolio is in cash.

ANR - Alpha Natural Resources (coal)
PFF - iShares S&P U.S. Preferred Stock Index
SSO - Proshares Ultra S&P 500

Read More: Market Has Likely Topped
Read More: Global Coal Rally Nearing End