Dynamic Growth: ETF Portfolio
NEW BUYS:
None
NEW SELLS:
None
SWITCHES:
None
Here are our Top 10 ETF's for the week of April 28th:
1) FXF: Currency Shares Swiss Franc Trust- .427
2) DBA: Powershares DB Agriculture Fund- .484
3) SLX: Market Vectors Steel Index Fund- .490
4) EWZ: Brazil Index- .477
5) EEB: Claymore ETF BNY BRIC- .454
6) OIH: Oil Services HOLDRS- .381
7) ADRE: BLDRS Emerging Markets 50 ADS Index Fund- .369
8) PGJ: PS Golden Dragon China Fund- .228
9) KBE: KBW Bank ETF- Not Rated
10) IYF: iShares Dow Jones US Financial Sector- Not Rated
Honorable Mention:
None
Notes:
The best ranked ETF's (Crude Oil Trackers, Short Term Bond Funds, Dollar Bear, Commodities, and Select Currencies) are the ones we refuse to chase, and feel are in bubble territory.
To further prove my point that the "New World Order" gangs intentions are for economic equilibrium, please note that three of the best performing currencies in our research ETF rankings are the CurrencyShares Mexican Peso Trust (FXM-.553), CurrencyShares Canadian Dollar Trust (FXC-.348), and the PowerShares DB US Dollar Index Bearish Fund ETF (UDN- .518).
Just as Steve Previs from Jefferies said in his CNBC interview, the implementation of a new currency (the "Amero") for all of North America "It isn't being talked about".
Please remember the words, " It isn't being talked about".
Everyone laughed when the prospects for a new currency was mention in Europe. Now they have the Euro. In the years ahead you'll find that the issues we are discussing today will eventually lead to the new "North American Union" currency called the "Amero".
Here are our Top 10 Fidelity Sector Funds for April 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:
On August 16, 2005, I wrote a blog entry entitled, "Where's Your Pain Threshold?". I am sticking to my guns that oil prices will not peak until Americans begin screaming bloody murder, and consumers begin demonstrating against high energy prices.
We are overweighted in energy in the Fidelity Sector Fund portfolio, and we will wait for the screaming, yelling, and demonstrations before we sell.
The Week in Review:
The stock market rally extended into week two as investors are betting that the Fed's next rate cut will be the last. In addition, US Government welfare checks (tax rebates) will be mailed early, and this will be great news for beer, liquor, and cigarette companies.
While most Wall Street guru's live in gated and guarded neighborhoods, spend their money on Worth Avenue (Palm Beach, etc), and at their Private Country Clubs, I am down in the trenches with you and see first hand what the masses are doing.
You and I know what the masses do, we know how they spend their money, we know that they are trend chasers, and impressing their friends is more important than doing the right thing. As a result they are broke because they chase things like the NASDAQ in 2000, and Real Estate in 2005.
A Modern Day Forrest Gump- A True Story!
My wife spent the weekend in a small town where her parents lived. She attended high school there, and worked in a bank for about 12 years. It is a small southern town with a population of about 7000.
In 1976 her graduating class included a boy named David. When David was born he had some medical problems and the doctors gave him too much oxygen which damaged his brain. Consequently, David had severe learning disabilities which challenged him throughout his childhood.
While most others moved on to college or went to school to learn a trade, David's disabilities did not allow him to do either. David was such a nice boy that the city fathers in this small southern town gave him a job picking up trash on the streets. David would walk up and down the streets with a trash bag on his left shoulder, and a sharply pointed stick in his right hand.
From 1976 to present day- 32 years, David met everyone in town. He never truly understood all that went on around him, but had an incredible memory for names. David memorized the name of every person he has ever met. One introduction is all it took. Once David knew your name, it was locked into his memory like stone.
If you think that is impressive, David didn't only memorize the names of everyone he met, he also memorized the license plate of anyone he met who drove a car. Today, if you walked up to David and mentioned someones name, he could rattle off the persons license plate too.
For 32 years David followed a very conservative lifestyle. Frankly, this is all he knew and understood. Every payday, David would go down to the bank and deposit his check. His only withdrawal was $10 in quarters to buy cokes at the corner vending machine.
Having a severe learning disability, David was never married and live with his parents. Assuming David worked a 40 hour week for 32 years at minimum wage, his savings account has to be quite substantial.
1976-1977@ $2.30/hr =$9568.00-$1040 Cokes= $8528
1978@ $2.65/hr= $5574.40-$$520 Cokes= $5054.40
1979@ $2.90/hr= $6032.00- $520 Cokes= $5512.00
1980@ $3.10/hr= $6448.00- $520 Cokes= $5928.00
1981-1989@ $3.35/hr= $62,712.00- $4680 Cokes= $58,032.00
1990@ $3.80/hr= $7904.00- $520 Cokes= $7384.00
1991-1995@ $4.25/hr= $44,200- $2,600 Cokes= $41,600
1996@ $4.75/hr= $9880.00- $520 Cokes= $9360.00
1997-June 2007@ $5.15/hr= $112,476- $5460 Cokes= $107,018
July 2007-April 2008@ $5.85/hr= $9360.00- $400 Cokes= $8960
Total Saved= $257,376.40
Approx. Interest- Taxes= $56,829.10
Approx. Total Saved = $314,205.50
There is no telling what another person has gone through unless we have walked in their shoes. How many times has David been looked down upon by others? What names has he been called? How difficult has it been?
In hind site, David is smarter than most people give him credit for. He has amassed a nest egg greater than the average person while having a learning disability, less knowledge, and less education.
David didn't try to keep up with the Jones', but he did know their names and license plate numbers. He wasn't sucked into greed and jealousy, and as a result, he feels no pain from a bad economy, a bad real estate market, a terrible credit crunch, or a downturn in the stock market.
Many people born with normal faculties just doesn't get it.
My wife saw David this weekend for the first time in 18 years. He looked at her and said, "hello Caroline, how have you been doing?"
Moral of the story.... I think you can figure it out.
The Week in Review:
The Fed is going to meet on April 29 and 30, and despite the inflation risks, they will cut the Federal Funds rate and Discount Rate 0.5% to 1.75%. The unknown is how the dollar will react to the Feds next move. If they cut .25 instead of .50 and change the bias to neutral, the dollar may rally and oil prices will decline.
On Friday, crude rose to $118.52/bbl after rumors circulated of US troop build up on the Iranian border, and news of warning shots taken in the Persian Gulf. Despite all of this the Dow ended the day 43 points higher.
Earnings last week showed an improvement over the previous week. A total of 1275 companies have now reported and average earnings are down 20% from Q1-07.
The economic news last week was rather light. On Tuesday, existing home sales showed a 2% drop in March, but down 20% y/o/y. The inventory of unsold homes rose to 4.06 million homes, which translates into a 9.9 month supply log jam.
This weeks economic reports;
Wednesday- Q1-08 Advance GDP (Previous 0.6%), April Chicago PMI (previous 48.2).
Thursday- March Personal Income (previous 0.5%), March Personal Spending (previous 0.1%), April ISM Manufacturing Business Index (previous 48.6), March Construction Spending (previous -0.3%).
Friday- April Nonfarm Payrolls (previous -80,000), April Unemployment Rate (previous 5.1%).
For the week:
-Gold closed at $889.70/oz -25.50 for the week. Last week gold closed at $915.20, and was trading at $927.00 two weeks ago.
I have said that Gold at $1000/oz looked much overbought. Once central bankers stop money pumping into the economy, I think a substantial correction in Gold will occur.
-The Commodities CRB Index closed at 417.80, down from 419.36 last week, but up from 407.45 two weeks ago.
-Crude Oil closed at $118.52 /bbl up from $116.16 last week, and up from $110.14 two weeks ago..
We need to see $75-$85/ barrel oil in the weeks ahead to get the economy back on track. Since I believe a correction is in the works, I will not overweight oil in the ETF portfolio at this time. Oil has remained above $100 for the eighth consecutive week.
If Crude oil and commodity prices do not correct sharply, the US economy will remain in serious trouble.
-The U.S. Dollar closed at 72.80up from 71.98 last week, and up from 71.78 two weeks ago.
The dollar has dropped to new all-time lows because of large account deficits, and rate cuts by the Fed. Once the rate cuts come to an end, I am looking for a decent rally in the dollar.
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
