Dynamic Growth: ETF Portfolio
NEW BUYS:
INP: India Total Return Index- .519
EWZ: Brazil Index- .517
NEW SELLS:
FVL: First Trust Value Line (R) 100 Fund- .285
SWITCHES:
To Honorable Mention
PZD: PowerShares Cleantech Portfolio- .369
Here are our Top 10 ETF's for the week of January 22th:
1) SLX: Market Vectors Steel Index Fund- .530
2) OIH: Oil Services HOLDRS- .526
3) EEB: Claymore ETF BNY BRIC- .519
4) INP: India Total Return Index- .519
5) EWZ: Brazil Index- .517
6) UTH: Utilities HOLDRs Trust- .446
7) ADRE: BLDRS Emerging Markets 50 ADS Index Fund- .444
8) FXF: Currency Shares Swiss Franc Trust- .442
9) VWO: Vanguard ETF Emerging Markets- .432
10) PGJ: PS Golden Dragon China Fund- .429
2007 Results for Dynamic Growth ETF Portfolio
Every week, as changes occurred in the Dynamic Growth ETF Portfolio, we reinvested the assets of each sale into the new buys. This strategy gave us a powerful compounding effect.
From January 2, 2007- December 31, 2007:
Our Top 10 ETF Portfolio Gained: + 10.56%
Our Top 10 Fidelity Sector Fund Portfolio Gained: + 13.028%
During the same period;
DJIA: +6.4%
S&P 500: +3.5%
NASDAQ: +9.8%
Notes:
It sure looks like a bear market to me. But, just as everyone begins to throw in the towel, the stock market will prove the majority of investors wrong.
The US markets are closed for the MLK holiday, but as we speak, the overseas markets are tumbling.
Today, many of the Asian and European Markets went into a freefall. Here are the closing numbers from Asia, Australia and Europe overnight;
Asia Pacific & Australia
Australia/ ASX 100: -138.40 -2.97%
Australia/ASX All Ords: -168.50 -2.91%
Hong Kong/ Hang Seng: -1,383.01 -5.49%
Hong Kong/ HSCC Red Chip: -278.84 -5.11%
Japan/Nikkei 225: -535.35 -3.86%
Europe
Belgium Bel 20: -202.65 -5.48%
Europe DJ Stoxx: -213.17 -6.36%
Europe Euronext 100: -56.06 -6.28%
Europe Euronext 150: -79.72 -5.32%
France CAC: -347.95 -6.83%
Germany DAX: -523.98 -7.16%
UK/ FTSE 100: -323.50 -5.48%
Americas
Canada/ TSE 300: -510.71 -4.01%
Canada CDNX: -211.24 -8.07%
Needless to say I am expecting a very weak open for the US equity markets on Tuesday. A major sell-off will lead to a capitulation day where investors will give up and throw in the towel. I don't know if the capitulation day will be Tuesday, Wednesday, or Thursday, but a major buying opportunity should appear from the carnage.
By months end, the Fed will aggressively cut interest rates which will result in a very strong oversold rally.
Today, I would use my time building a wish list of stocks, ETF's or Funds you've been wanting to buy.
As far as potential entry points are concerned, we look to see where the Dow and the NASDAQ would be at declines of 10%, 15%, 20%, and 25%. The following percentage declines would put the DJIA and the NASDAQ at these levels.
Declines from 14,166:
10%= DJIA 12,749
15%= DJIA 12,041
20%= DJIA 11,332
25%= DJIA 10,624
The Week in Review:
One of the biggest con-jobs perpetrated on the American people (the dot-con was the biggest) by far is talk about the "Goldilocks" economy. What bunch of crap! I've told you over and over again that the deliverers of this news were lying to you, and I hope you listened.
Here is a YouTube video posted by Don Harrold on Jim Cramer and Erin Burnett convincing you to buy into the "Goldilocks" economy. Unbelievable!
While most of these con-artists on the financial news channels were getting you to focus on "Goldilocks", they forgot to mention that she was out numbered by the "Three Bears".
Today, the "Three Bears" are in charge.
Remember the Mark Twain quote from last week?
"If you don't read the newspaper you are uninformed, if you do read the newspaper you are misinformed."
Folks, believe it or not, you are misinformed about much more than you think.
So, now that "Goldilocks" is dead, its time to focus on "Chicken Little".
According to Wikipedia, the Chicken Little Award is given by the National Anxiety Center to people and organizations that they consider to be engaged in deliberately false, media-driven scare campaigns regarding environmental matters.
Environmental matters? They should give the award to people and organizations that they consider to be engaged in deliberately false, media-driven scare campaigns regarding the financial markets and politics, oil, and war.
In my opinion, we don't see 15%-40% corrections very often. In fact, historically they have proven to be some of the best investment opportunities. Huge gains can be made by ignoring the negatives, and by investing in quality stocks during periods of market turmoil.
Spotting a market top or bottom is not always easy. The reason is because investors get caught up in the euphoria or hype of the moment, or get depressed during periods of hysteria.
My thoughts here are simple, buy a 1/3 position when the DJIA drops 10-15% range (12,749-12,041), invest another 1/3 when the DJIA drops 15%-20% (12,041-11,332), and invest the final 1/3rd when the DJIA drops 20%-25% (11,332-10,624). Invest slowly and methodically.
For the week:
-Gold closed at $881.70/oz -16.00 for the week. Last week gold closed at $897.70, and was trading at $859.83 two weeks ago.
-The Commodities CRB Index closed at 360.87, down from 365.15 last week, and down from 366.22 two weeks ago which was a new high. The previous high was on November the 7th at 359.05.
In my opinion, the CRB Index is overbought, and due for a pullback.
-Crude Oil closed at $89.92 /bbl down from $92.16 last week and down from $99.33 two weeks ago.
Like I had said last week, I wouldn’t be surprised to see an adjusted trading range of $75-$85/ barrel. This is why I refuse to overweight oil in the ETF portfolio despite of the current rankings in our system.
Adjusted for inflation, oil traded at $100/bbl two weeks ago for the first time in history. This includes the highs set in the 1970s.
-The U.S. Dollar close at 76.37 up from 76.01 last week, and up from 75.82 two weeks ago.
Our current asset allocation is as follows;
65% Equities: (Normally 95%) Aggressive
55% Equities: (Normally 80%) Moderately Aggressive
45% Equities: (Normally 60%) Moderate
25% Equities: (Normally 40%) Moderately Conservative
10% Equities: (Normally 20%) Conservative
