Dynamic Growth ETF Portfolio
NEW BUYS:
None
NEW SELLS:
None
Here are our Top 10 ETF's for the week of August 27th:
1) SHY: iShares Lehman 1-3 Year Treasury Bond Fund- 1.173
2) ITA- iShares DJ Aerospace & Defense-.566
3) AGG: iShares Lehman Aggregate Bond Fund- .516
4) IAH- Internet Architecture HOLDRs Trust-.514
5) PGJ: PS Golden Dragon China Fund- .493
6) IXP: Telecommunications Sector Index Fund- .493
7) EWS: iShares MSCI Singapore (Free) Index Fund-.485
8) VOX: Vanguard ETF Telecommunication Services- .383
9) EWM: iShares MSCI Malaysia (Free) Index Fund-.368
10) DND: Wisdom Tree Pacific Ex-Japan Total Dividend- .345
Notes:
1) Our two bond ETF's witnessed a mini surge in price as fears in the commercial paper market lead to a sharp decline in the 3 month Treasury Yield- See SHY & Agg Charts.
2) After a brief dip below $60, our #2 holding (iShares DJ Aerospace & Defense-ITA) surged back above the $65 mark to close at $65.26. Is something brewing in Iran?
3) Technology shares continue to gain ground as shares of our Internet Architecture HOLDRs (IAH) continue to march higher.
4) Despite the efforts to slow the economies in Asia, our 3 ETF's continue to rebound nicely- See PGJ, EWS, EWM Charts.
Honorable Mentions (Holds):
FXA: CurrencyShares Australian Dollar Trust- .308
Other currency ETF's showing strength are;
FXE- Euro Currency
FXB- British Pound
FXF- Swiss Franc
FXC- Canadian Dollar
As talks of lowering interest rates in the US persist, other world currencies are gaining ground against the dollar, and seen as safe havens.
The Week in Review
For those of you who have been skeptical about our theory about the "Plunge Protection Team", better known as Executive Order 12631- Working Group on Financial Markets (The Wizard of ???), has been at work for the past few weeks. You should have no doubts about who controls the markets now.
While the financial media has been calling for the demise of the markets, in particular the financials, the "Working Group on Financial Markets" have now come to the rescue. Now that the central bank has pumped enough money into the to stablize the stock market, we should continue to see a recovery unfold.
The debt markets will slowly recover, bank stocks will be seen as the best buys since 2002, and even gamblers on Countrywide (CFC) and Thornburg (TMA) may get their money back. Bank of America announced they would invest $2 billion in Countrywide Financial, which is the nation’s largest mortgage lender, in order to help it better weather the problems it’s having with subprime loans.
If the Fed cuts the federal funds rate 25 basis points (.25%) in September, currencies around the world will gain ground against the dollar. If this happens, inflation fears will be re-ignited, commodities will rebound, and oil prices will march higher.
In our Fidelity Sector Fund portfolio, we feel the portfolio now sits in the sweet spot of the best performing sectors.
Here are our Top 10 Fidelity Sector Funds for August:
1) FSESX- Energy Services
2) FWRLX- Wireless
3) FSENX- Energy
4) FSTCX: Telecom
5) FBSOX: IT Services
6) FSCSX: Computers & Software
7) FCYIX- Industrials
8) FSDAX: Defense & Aerospace
9) FSNGX- Natural Gas
10) FSPTX- Technology
Honorable Mentions (Holds):
FDFAX: Consumer Staples
FSCHX: Chemicals
While the stock market will not be in full recovery mode until after Labor Day, it is going up without a lot of attention in very quiet manner.
We raised our allocation to the stock market by another 5% when the Dow dropped below the 13,000- 12,800 mark and the SPX to below 1400. Our asset allocation now stands as follows;
70% Equities: (Normally 95%) Aggressive
60% Equities: (Normally 80%) Moderately Aggressive
50% Equities: (Normally 60%) Moderate
30% Equities: (Normally 40%) Moderately Conservative
15% Equities: (Normally 20%) Conservative
