But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.
Rates May Rise: Shift Your Focus To Cyclical Stocks
With a rising rate environment on the horizon, it would make sense to shift your focus to cyclical stocks and away from defensive sectors.
REITs are providing an average dividend yield of 3.5%, so investors are drawn to them. This is causing rich valuations and making REITs look overpriced.
A market rebound of more than 12% from the depths seen in October has left investor sentiment buoyant.
All funds are expected to pay their realized net capital gains every year in the form of capital gains distributions. Most funds prefer to pay at the end of the year.
Rebalancing your portfolio means bringing the portfolio back to the asset allocation levels specified in the financial plan. Not rebalancing can expose you to higher risk.
As the end of the year approaches, investors need to calm their fears about capital gains increasing their tax bills. They need to enjoy and celebrate gains accruing from the positive global financial markets.
A recent study by Sussman and Olivola states that people dislike paying taxes because of the rational economic motivation to avoid monetary costs.
We’ve seen a phenomenal market rally this year. Currently, the S&P 500 (SPY) is giving spectacular returns of 11.6% year-to-date (or YTD). The Dow Jones Industrial Average (DIA) is up 7.6% YTD.
With high interest rates, a portfolio exposed to both bonds and the utilities sector could see negative returns. This could make you face a risk twice.
Emerging market bonds help diversify your portfolio, given their low correlation.
A case could still be made for tech stocks. Cyclical sectors, like technology, usually tend to outperform the S&P 500 (SPY) when the economy is improving.
If you’re looking for a simple way to invest in Japan, we suggest keeping it simple with a low cost ETF. The iShares MSCI Japan ETF (EWJ) provides diversified access to large- and mid-cap Japanese stocks.
Pension reallocation – Japan’s Government Pension Investment Fund, the world’s largest pension plan, significantly increased its overall allocation to domestic stocks, from 12% to 25%. This will provide a huge market boost:…
Earnings momentum – Worries about the impact of a new consumption tax led many Japanese companies to lower their earnings guidance for the year. Since then, a better-than-expected outcome has set the market scrambling to reprice.
Our view is that investors, who include gold in their portfolio for diversification reasons and as an inflation hedge, should maintain that position, and for long-term investors a small allocation to gold could be reasonable.
For now, we continue to expect a world in which U.S. growth overshadows that of other developed countries, resulting in a strong dollar and weaker commodity prices.
Stocks advanced again last week, driven by an improving economic picture and an encouraging earnings season by U.S. companies. But a stronger economy comes with a flip side: less need for monetary stimulus.
Rate will likely remain low “for considerable time” even after the conclusion of the bond buying program (TLT) in October.
I think stocks can make further gains, and would continue to favor Japanese equities while adopting a more positive stance on U.S. consumer stocks.
However, even though income growth is likely to remain lackluster, consumer spending could well be boosted going forward by lower energy prices and the recent drop in interest rates, which has pushed 30-year mortgage rates back down to 4%.