I rarely do this; however, I like my blog visitors and I am in a good mood tonight. Below is the S&P current weighting, highlighting current weights per sector. Below are some ideas per sector. Come third quarter, I will be allocating more funds with the accounts I manage, so I will use this as a guide and apply a new weight to each of the sectors, that differ from the S&P weights. For example, tech represents a 18% in the S&P but in my model portfolio, it might represent 15%. Below is a list of longs and also a ETF list that I have on my radar. Of course, I can’t tilt my entire hand but some of my watchlists have over 100 stocks, so it would take a long to write up. 75% of these stocks I would buy now, but some I would hold off on. If you have any questions, drop a question in the comment section.
Current S&P Weighting:
Technology (18%), Financials (13%), Energy (13%), Healthcare (13%), Consumer Staples (12%), Industrials (10%), Consumer Discretionary (9%), Materials (4%), Utilities (4%), Telecom (4%)
Tech: GLW, CSCO, DELL, EMC, SAP, MSFT, QCOM, BRCM, OPWV, OTVI, YHOO, XLK, HIMX, TSM, XLNX, TER, and AMD for a spec play on improve fundamentals in PCs.
Financials: BAC, WFC, SLM, PNC, STT, STI, KEY, BRK.B. Life insurers look interesting; however, carry high risk due to the complexity of their financial instruments. I like MET and for a spec maybe HIG.
Energy: CVX, COP, HES, DVN, APC, APA, and RIG. (Sector needs to cool a little, I wouldn’t buy any at these levels)
Healthcare: HUM or UNH but the sector is at serious risk due to the government healthcare plan. I would weight this 3 or 4%.
Consumer Staples: PG, JNJ, or UN.
Industrials: VMI, UTX, UNP, BHI, and EMR
Consumer Discretionary: GME, LOW, HD, COST, WMT, FDO, TGT, UA, EBAY.
Materials: ACH, PCU, BHP, POT, AGU, IPI, MON, CLF, MT (sector needs a pullback)
Utilities: Don’t like the sector. Reminds me of tobacco because the government can make one big decision that can impact profitability for years. If I had to buy one, it would be FPL or D.
Telecom: VZ, T, and maybe S for a spec.
That is my sector buy list if I was forced to put 100% in the market tomorrow. Below are some ETFs that are also on my buy/watch list:
DXO (double long oil), UNG (natural gas etf), JJC (copper etf), FXA (austrialian currency trust), FXC (Canadian currency trust), DBA (soft commodities etf), DBC (commodities index etf), EWZ (Brazilian etf), CAF (Chinese A shares fund), MXI (basic materials etf), DGP (double long gold), AGQ (double long silver).
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A few questions:
ReplyDelete1. What sector do you like the best now?
2. What is your favorite materials/inflation buy?
3. Credit card defaults at record highs, could this hurt your bank purchases?
Thanks ahead of time RF
ReplyDeleteThese plays are investments not trades?
ReplyDeleteNo GE for industrial play?
ReplyDeleteCraig -
ReplyDelete1.Good questions. I like tech because of M&A that will come but it may seem overowned. Telecommunications has the most "value" but I would say either finanicals or tech.
2. oil.. but gold, silver will work
3. yes it is concerning but i am buying bigger banks with core earning power, financials like AXP and COF wil be hurt the most.
Anon -
these are seen as investments (3-6 months out) that seem to have "some" value. Value is harder to fine these days.
BB -
I don't like GE at all. UTX and EMR have done more to cut costs and improve operations and don't have the finanical arm. GE may go higher but Immelt, in my view, is the most overrated CEO is america and could'nt run a lemonade stand, much less a $300B company