Dynamic Growth: ETF Portfolio
NEW BUYS:
None
NEW SELLS:
None
SWITCHES:
None
Here are our Top 10 ETF's for the week of March 17th:
1) DBA: Powershares DB Agriculture Fund- .710
2) EWZ: Brazil Index- .575
3) SLX: Market Vectors Steel Index Fund- .567
4) FXF: Currency Shares Swiss Franc Trust- .565
5) EEB: Claymore ETF BNY BRIC- .487
6) OIH: Oil Services HOLDRS- .393
7) ADRE: BLDRS Emerging Markets 50 ADS Index Fund- .391
8) PGJ: PS Golden Dragon China Fund- .285
9) KBE: KBW Bank ETF- Not Rated
10) IYF: iShares Dow Jones US Financial Sector- Not Rated
Honorable Mention:
None
Here are our Top 10 Fidelity Sector Funds for March 2008:
1) FSESX- Energy Services
2) FNARX: Natural Resources
3) FDFAX: Consumer Staples
4) FSENX- Energy
5) FSCHX: Chemicals
6) FSMEX: Medical Equipment
7) FSCGX: Industrial Equipment
8) FSDPX: Materials
9) FWRLX- Wireless
10) FSRBX: Banking
Honorable Mention (Holds):
FSDAX: Defense & Aerospace
Notes:
Sunday night, Bear Sterns was under intense pressure to find a buyer amid the liquidity crisis, and JP Morgan/Chase stepped in to scoop up BSC for $270MM or $2/shr.
The Fed also cut the discount rate 25bp to 3.25 percent. Tomorrow, investors are anticipating the Fed will cut the Fed Funds rate by 100 basis points to 2.00%.
The financial crisis gripping the markets is the result of years of greed and stupidity. Lenders got greedy by developing new and exotic ways to lend money, and investors were stupid to take on massive amounts of debt when they couldn't afford the payments.
Condo and Real Estate flippers hoping to be the next Donald Trump let their greed overtake common sense, so now they have to live with the consequences.
Right now, many Consumers, Wall Street investment banks, and Lenders are experiencing a good ole dose of financial Corporal Punishment. Sometimes this form of punishment is the only thing that will work to teach people a lesson.
Common Sense has been lacking in our society for quite sometime. Oddly, the lack of common sense has affected the very rich as well as the very poor. Like I have said before, super intelligence can help you solve a calculus problem, but in everyday life having or not having common sense can make you or break you.
I read this obituary of "Common Sense" in the latest issue of "Collegiate Baseball". I thought it would accurately explain what is going on in our society (and the financial markets) today. Since people drive our economy and the stock market, understanding how they think lets us know what we can expect down the road.
The Death of Common Sense
Today we mourn the passing of a beloved old friend, Common Sense, who has been with us for many years. No one knows for sure how old he was, since his birth records were long ago lost in bureaucratic red tape. He will be remembered as having cultivated such valuable lessons as: Knowing when to come in out of the rain; Why the early bird gets the worm; Life isn't always fair; and Maybe it was my fault.
Common Sense lived by simple, sound financial policies (don't spend more than you can earn) and reliable strategies (adults, not children, are in charge) His health began to deteriorate rapidly when well-intentioned but overbearing regulations were set in place. Reports of a 6-year-old boy charged with sexual harassment for kissing a classmate; teens suspended from school for using mouthwash after lunch; and a teacher fired for reprimanding an unruly student, only worsened his condition.
Common Sense lost ground when parents attacked teachers for doing the job that they themselves had failed to do in disciplining their unruly children.
It declined even further when schools were required to get parental consent to administer Calpol, sun lotion or a band-aid to a student; but could not inform parents when a student became pregnant and wanted to have an abortion.
Common Sense lost the will to live as the Ten Commandments became contraband; churches became businesses; and criminals received better treatment than their victims. Common Sense took a beating when you couldn't defend yourself from a burglar in your own home and the burglar could sue you for assault. Common Sense finally gave up the will to live, after a woman failed to realize that a steaming cup of coffee was hot. She spilled a little in her lap, and was promptly awarded a huge settlement.
Common Sense was preceded in death by;
-His parents, Truth and Trust; his wife,
-Discretion; his daughter,
-Responsibility; and his son,
-Reason.
He is survived by his 3 stepbrothers;
-I Know My Rights, Someone Else Is To Blame, and I'm A Victim.
Not many attended his funeral because so few realized he was gone.
The Week in Review:
Wall Streets financial woes continue. Last Tuesday the Fed announced it would inject $200 billion into the markets by allowing banks to exchange illiquid mortgage securities for Treasuries. As a result, the DJIA rallied more than 400 points, its biggest jump in five years.
Following Tuesday's news, the DJIA began to slide as rumors of Bear Stearns demise began to surface.
As more bad news surfaced in the credit markets, investors began to stiff out more rate cuts by the Fed. As a result oil shot above $110/bbl and gold closed near $1000/oz. The dollar had another horrible week as news of more rate cuts cut the greenback into little pieces of confetti.
We are getting close to adding the Fidelity Select Home Finance (FSVLX) fund to our Fidelity Sector Fund portfolio. It looks as if the full blown panic we spoke of last week is beginning to unfold. We will alert you when we are ready to pull the trigger.
For the week:
-Gold closed at $999.50/oz +25.30 for the week. Last week gold closed at $974.20, and was trading at $975.00 two weeks ago.
-The Commodities CRB Index closed at 416.40, up from 411.65 last week, and up from 412.69 two weeks ago.
-Crude Oil closed at $108.74 /bbl up from $105.15 last week and up from $101.84 two weeks ago.
Oil prices are in a tug of war between a weaker dollar, and the potential for a weaker economy. If oil and commodity prices do not correct substantially, the US economy will be in serious trouble.
-The U.S. Dollar close at 71.67 down from 73.04 last week, and down from 73.70 two weeks ago.
The U.S. prime bank rate held steady at 6.00%.
Average earnings for the 4th quarter-2007 fell -56%. This compares to a drop of -21% for the 3rd quarter, and +13% for the 2nd quarter.
The equity markets continuing to re-testing the intra-day lows set in January. A successful retest could set the stage for a oversold rally. If the retest does not hold, we will see further lows to 11,300, and then 10,600.
Our current asset allocation is as follows;
70% Equities: (Normally 95%) Aggressive
60% Equities: (Normally 80%) Moderately Aggressive
50% Equities: (Normally 60%) Moderate
30% Equities: (Normally 40%) Moderately Conservative
10% Equities: (Normally 20%) Conservative
