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Thanks @Ted, for posting Fidelity's latest sector rankings and outlook. I found the link to be beneficial.
One of the things I have done is that I strive to maintain certain sector allocations within my portfolio. In the minor sectors of materials, real estate, communication and utilities I strive to maintain at least a five percent weighting. In the major sectors of consumer cyclical, financial, energy, industrials, technology, consumer defensive and healthcare I strive to maintain at least a nine percent weighting in each. When combined these base weightings add up to 83%. This leaves 17% that can be moved around to overweight sectors that are more in favor than others.
Currently, I am overweight, from my base weightings, financials by +2%, communication by +2%, industrials by +1%, technology by +2%, consumer defensive by +4% healthcare by +3% and utilites by +3%.
Thanks @Ted for posting the year-to-date performance for the S&P 500 sectors.
It will be intesting to see how the year progresses and those sectors now leading will finish the year.
I am thinking energy, materials and industrials (said by some to be the old economy sectors) will continue to rebound. And, if they do then about 20% of my portfolio will be weighted towards them and about 33% towards the defensive sectors (health care, consumer defensive and utilities) to help provide some needed support during a downdraft. Then add communications and real estate that also has helped, at times, to provide support during pullbacks puts me at about 45%. With the markets selling on a TTM P/E Ratio of about 24 (as reported overall earnings) I have decided to take some cautionary positioning while affording myself some upside opportunity as well. Throw in technology at +2%, for me, tilts me to about 55% towards sectors that do well in pullbacks. Although, I have included healthcare in my defensive positioning it might not perform, this time, as expected.
Think I'll stay with my positioning as summer will soon arrive and coming with it perhaps a soft period for stocks.
Comments
One of the things I have done is that I strive to maintain certain sector allocations within my portfolio. In the minor sectors of materials, real estate, communication and utilities I strive to maintain at least a five percent weighting. In the major sectors of consumer cyclical, financial, energy, industrials, technology, consumer defensive and healthcare I strive to maintain at least a nine percent weighting in each. When combined these base weightings add up to 83%. This leaves 17% that can be moved around to overweight sectors that are more in favor than others.
Currently, I am overweight, from my base weightings, financials by +2%, communication by +2%, industrials by +1%, technology by +2%, consumer defensive by +4% healthcare by +3% and utilites by +3%.
Sector SPDR Funds YTD As of 4/29/16:
S&P 500 Index +1.05%
Consumer Discretionary (XLY) +1.33%
Consumer Staples (XLP) +3.58%
Energy (XLE) +11.90%
Financial Services (XLFS) -3.21%
Financials (XLF) -2.18%
Health Care (XLV) -3.11%
Industrials (XLI) +5.94%
Materials (XLB) +8.48%
Real Estate (XLRE) +0.63%
Technology (XLK) -1.63%
Utilities (XLU) +11.88%
Regards,
Ted
It will be intesting to see how the year progresses and those sectors now leading will finish the year.
I am thinking energy, materials and industrials (said by some to be the old economy sectors) will continue to rebound. And, if they do then about 20% of my portfolio will be weighted towards them and about 33% towards the defensive sectors (health care, consumer defensive and utilities) to help provide some needed support during a downdraft. Then add communications and real estate that also has helped, at times, to provide support during pullbacks puts me at about 45%. With the markets selling on a TTM P/E Ratio of about 24 (as reported overall earnings) I have decided to take some cautionary positioning while affording myself some upside opportunity as well. Throw in technology at +2%, for me, tilts me to about 55% towards sectors that do well in pullbacks. Although, I have included healthcare in my defensive positioning it might not perform, this time, as expected.
Think I'll stay with my positioning as summer will soon arrive and coming with it perhaps a soft period for stocks.