So what sorts of stocks/funds would you invest in right now if you were in the US/Canada? I remember from the CFA Level 1 readings, that if you think you’re heading into a recession you should focus on bonds and if you think the economy is picking up to focus on equities. So what are some real-life examples of what you’d invest in right now? Sorry if that’s a silly question, I’ve just never bought a stock/fund/bond in my life. Thanks.
My investment thesis for 2008 is to go for blue chip yield stocks. The yields are fairly high and I think that there’s going to be alot of movement out of other sectors/equity classes in to stocks that offer some hard return. My expectation is that this group is going to beat the overall market this year and offer some protection against risk.
XLP (consumer staples ishare) is trading at the same price per share as it was in 1998 yet the dividend has steadily increased. Now the dividend is triple what it was in the late 90’s yet the share price is the same.
Large cap value with high dividend yields sounds sensible to me. You’ll want to short out the beta exposure on the market with a future, a short ETF, or a put for at least a little while. A little in Emerging market equities may be sensible, just in case decoupling of fundamentals is true (I never thought that EM financial assets would be decoupled in a panic, but company fundamentals might be somewhat, which says something about a recovery). I would stay away from China right now, since I think the real crash will come before the Olympics.
How about FIG?
count me in for gold… i think it can deliver anything from 15-20% this year i would say gold ETF’s are my best bet…once central banks start their gold buying spree in full fledge there is going to be no stopping gold
predicting gold would sound a lot more intuitive if it was LAST year and not now, after it has already run up this much…
This is a great question. I shifted alot of assets to investment grade bonds as a hedge, however even the bond market is suffering…
Homebuilder ETF. Invested on Jan 2nd. I am fairly happy so far with how it has done relative to the market, and I’ll continue to hold from now until well into the recovery. Recovery in the housing market will lead the recovery in other sectors IMO.
Too much optimism. Until i see indicators that economy is recovering i will hold everything in cash and short-term govt securities. Gold might be a good bet, but if you look at trend, gold hardly ever outperformed inflation in the long run, so i am skeptical Edit: I do hold short-term govt debt and cash in my portfolio, but i would advise against buying bills now as yield is at all time low and upside is very limited.
Homebuilder ETF? Yikes. There’s bottom fishing…and then theres investing in homebuilders. I think I’d hold off a little while longer before investing in that sector.
How does everyone feel about making a bet on any one or combination of ML, Bear, or Citi?
That all depends, if your a technical trader that seeks opposing positions you would do quite the opposite because you would assume that everyone else has made the move you suggested already leaving the positions dumped in teh mass exodus undervalued.
I recommend Iphones personally, I just bought one this week, best investment I ever made.
Geico, I just switched.
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Reastically, I agree with comp_sci_kid. I still think everyone is too optomistic on the state of the markets and I feel it has a way to fall. I see the argument that gold has already had its run, but I still like it’s outlook over then next 12-24 months. I would also overweight international stocks for now.
I actually like Canadian commercial REITs right now as a sector play- see ishares XRE. I think they’ve been dragged down too far by the negative sentiment in the US and the expectation that the commercial real estate market is next to go in the US. But in Canada the fundamentals of the underlying assets are strong and they are trading 15-20% less than NAV. At those discounts there could be some consolidation or privatization in the sector. And we’re in a decreasing rate environment, when REITs tend to shine. They also yield around 6%.
I am in all cash for almost 2 months. If I have to put money to work, I will buy GLD, SLV. For stocks, MA, ISRG and MON and hedge it with QID etc. This market is too volatile for me to risk my own money. I will continue to hold cash for some time. I think market will continue to go down for a while and it is not a best time to invest. But the beauty is that the worst time to invest usually follows by the best times to invest, we just do not know when yet.