Hello,
Last week I stated that I had started to increase my allocation to emerging markets based upon them being out of favor. They were in next to last place (10th) based upon their position reporting. This week, emerging markets have moved upward into fourth place. You can read all about their movement it in this weeks editon. Perhaps you will be able to pick up on some out of favor assets that might have the capacity to make some strong upward moves in the near term. I am currently looking at real estate, utilities, telecom and consumer staples as we move towards and into October anticipating that they too will be making an upward advancement should the fed "taper the taper." My thoughts are that I can buy them at discounted prices due to them currently being out of favor.
http://investwithanedge.com/newsletter-archives/091113-tapering-the-taperHave a great day ... and, I wish all good investing.
Skeeter
Comments
Just to play devils advocate, from Rowland's cometary, you can also make the argument this is not the time to invest in EM stocks. He starts by talking about overstated employment numbers and possibly a weaker U.S. economy being ignored. One could argue that if the U.S. economy is going to struggle, the emerging markets will struggle even more if Americans aren't buying their products. If there is a pull back in domestic markets, EM stocks could go down 2x.
But, I don't like advocating for the devil, so I would say your incremental adjustments when you see value will work just fine over time. Good investing to you...
As you and others know that follow my post I recently reduced by exposure in the income area of my portfolio by 5% (from 30% to 25%) and raised my allocation to equities by 5% (from 40% to 45%) with alternatives remaining at 10% along with cash at 20%. Currently, I am heavy cash and light equities from these targets. I am in the process of working my way towards my equity target at a measured pace as I am finding under valued and/or oversold equity assets, I’ll buy a little. I hope to be at my target allocation by the end of October.
I have been recently adding to my European and Emerging Market equity positions along with some select growth and income funds that are paying good dividends. These dividend paying funds hold many of the current undervalued and oversold sectors of the S&P 500 Index. They are real estate, utilities, consumer staples, health care and telecom. In buying these type funds, I feel I will be getting better value with my investable dollars rather than chasing the hotter assets.
I am thinking that we will be getting a pull back in the market before Halloween but there is no certainty on this and this is why I am working my way towards my equity target allocation at a measured pace. I do think that we will have a fall rally that will hopefully take the S&P 500 Index to the 1770, or better, range for about a five percent increase from the current level, lets call it 1690.
By investing in the undervalued and oversold assets it is my belief that greater upside can be had in them over the fully valued and over valued & overbought assets. Anyway, that is my thinking.
Hope this helps you and perhaps others understand how I am positioning and my thinking.
Again, thanks for stopping by.
Skeeter