Time to re-balance the portfolio...what are your thoughts

[axl911]

Where do you think these sectors are heading for the next 12 months? Looking at broader market. No individual stocks please.

S&P 500 - I would imagine the US will continue to grow as we are becoming more efficient (fairly low labor upticks) and the RoW becoming more unstable. It is true that inflation and the labor market are the biggest risks, but if we the labor market doesn't tank and drag the economy down the US would emerge in a very strong and competitive right?

US Housing - are we near the bottom, ie. excess valuation worked off yet?

Energy - Would it continue to go up as the US & world work its way out of the recession?

China - Inflation and overvaluation still worries me on this one.

Emerging Market - is down this year but will it pick up again or inflation and instability will keep it down?

Gold & Bond - don't want to touch these b/c of gold's sky high prices and inflation risks for bonds.

[sammyg2]

Here's how my play fund is currently mixed.
It's waaay too aggressive for most but I believe it makes sense right now and at least through the summer unless all heck breaks loose, I'm averaging nearly 1% gain per week:

About 30% is small cap, about 37% is S&P 500, etc. Nothing big in precious metals, I got out of that at the end of last year.

[RWebb]

might want to black things out a little better...

[sammyg2]

Originally Posted by RWebb

might want to black things out a little better...

LOL, is that better?
That's just my IRA play fund that I mess with, I'm more likely to gamble with it that my 401Ks or annuity.
If I get lucky with it and make a bunch O'$$$ I can pretend I know what I'm doing, if I do something dumb and lose a bunch of it my life won't change, just my humbleness

[MRM]

Stay out of the emerging markets. They are a bubble that is about to pop. Don't get too fancy or creative. Follow the broad trends of the market.

Commodities are going crazy because world-wide industrial demand is driving their prices and not just speculation of people who think all world currencies are about to default. Oil and mining companies, including processing and transportation, are poised to do well. Picking the orchid out of the coal mine of those stocks is the trick. I don't know anything about that, but Sammy does. I'm thinking his stock tips in this environment are likely to be pretty good. But in general you know that commodities prices are rising and will rise higher, so if you can find a stock the increases in value as commodities rise, you're in.

Same with financials. They are slowly getting back into the game and are enjoying new fees and higher rates. Lots of banks have had pretty good runs lately. Looking at well managed banks that have been beaten up is a good strategy. I saw a nice write-up on Wells Fargo, but I didn't buy any. Citibank is an interesting stock. With the government divesting its shares, the price should be firming up and they could be poised to go higher.

Otherwise, just buy an S&P 500 index fund. The S&P was up something like 3.5% in January. That's better than T Bonds pay for the year. As inflation comes, the stock market will have to inflate with it. Interest rates will rise, which will take some investment out of the stick market, but it will still rise during inflationary times.

The long term strategy right now is to be broadly invested in US stocks, preferably in an index fund. Wait until inflation hits and the Fed starts raising rates. Just as rates hit the peak and start coming down and inflation is on its way to being tamed, pull everything out of the stock market and build a ladder off T Bonds.

Think 1992 and 9.5% on the 30 year T Bond. That's what's going to happen again. When it does, I'm going to sell every stock I own and go long on bonds. I won't need Bernie Madoff to guaranty regular returns on my investments then.

[sammyg2]

Originally Posted by MRM

Oil and mining companies, including processing and transportation, are poised to do well. Picking the orchid out of the coal mine of those stocks is the trick. I don't know anything about that, but Sammy does. I'm thinking his stock tips in this environment are likely to be pretty good. .

I used to think the same thing, til the industry went south.

Turns out I was good at predicting upward movement but failed to predict a huge down turn.
The entire industry tanked and I didn't see it coming.
I lost lots of $$$, as did others who listened to me. From that point on I stopped giving investment "tips".
Evidently, it's easy to be an investment guru when everything is going up.

Now I only occasionally share what I'm doing with lots O'disclaimers that I should not be listened to cause I just guess.

So if anyone asks what oil company they should invest in, I just say "buy apple"

[sammyg2]

I was listening to a speech from a senior VP of Shell oil company in January 2006.
Afterwards in the Q&A session, I asked why it appeared that Shell was moving towards getting out of the North American refining market while another smaller company was trying to expand.
He started off not confirming or denying if they were selling and getting out or not, and then he offered this: "evidently they have more faith in this market over the next few years than we do".
2 months later Shell sold that refinery to a small independent refining company for a huge amount of money, probably 3 times what it's worth now.
I shoulda listened to him.

But .... howd he know? How did the Shell execs know the US economy and refining industry was gonna tank 1-1/2 years before it did?
That's when I figured it out. The really big boys know what's gonna happen before it does. I don't know if they actually control things and make it happen or if they just see it coming from a long ways away, but they are always ahead of the game.
The best I can do is watch what they do and ride their coat-tails.
There ain't no insider info either, everything I disclose is public info or old enuff it aint applicible no mo.

I can tell you this, if Shell or BP start spending money on refining again I'm in.
But they are doing just the opposite of that, they are getting out of refining as quickly as possible on a global scale and investing more in oil exploration and production.
That suggests that the money to be made in the near future is in oil, not refining.

There might be money to be made in refining companies over the next 3 months but after that I doubt it. But then again, I don't freaking know for sure.

It's just a guess, a hunch, a feeling and it's worth everything ya paid for it

[on2wheels52]

"I'm averaging nearly 1% gain per week"

I like you to expound a bit more on your selections, or did you mean per month?
Jim

[sammyg2]

Originally Posted by on2wheels52

"I'm averaging nearly 1% gain per week"

I like you to expound a bit more on your selections, or did you mean per month?
Jim

Up 5.1% so far this year, over the past 4 months up about 15%.

Of course I won't be able to sustain that. The market has been climbing in a serious bull market since the lows, the S&P has doubled since it hit bottom, it'll level off and may correct downward when the DOW hits 12.5k or it could keep going all the way back up to 14k, who knows.

But for now, I'm gonna take credit for dumb luck and pretend I know what I'm doing. As soon as it dips 5% I'm slapping everything into money market

[sammyg2]

Here's what the S&P 500 has done over the last 6 months, if we can't keep up with the S&P over the long haul we should pay someone to invest for us.

[on2wheels52]

All right, if we're talking about since November it looks like I'm not far behind your pace (but let's not keep time by watching the second hand). I haven't bought any new holdings lately, just letting the blue chip stocks and quality mutual funds run their course. If a simple farm boy can do ok anyone can.
Jim