Dynamic Growth: ETF Portfolio

Here are our Top 10 Fidelity Sector Funds for May 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

The Week in Review:

Its become very clear that the tailwinds that drove the US economy from 2003-2007 have now become headwinds. Of course I am talking about Real Estate and the availability of all the credit that had been extracted to fuel consumer purchases.

What I believe we are looking at is a traders market. Long term investors will become extremely frustrated as the major market indexes will probably seesaw between the upper end of the trading range to the lower end many times.

As it currently stands, the markets are now attempting to test the upper end of the trading range.

Savvy investors who don't mind paying short term capital gains will be able to buy the dips, sell the rallies, short, cover, and repeat the process several times.

The US dollar is being destroyed, and the nightmare scenario of oil producing nations rejecting the dollar as payment for oil has already begun. This is one reason why gold and commodities have rallied so sharply. These assets are viewed as the best hedges against a falling dollar and inflation.

Longer term (2-5 years), I believe the solution for the dollars woes will occur according to plan. Americans will be screaming for mercy as oil prices become unaffordable, and commodity prices cause food prices to spike even higher.

The solution of course is the one I have mentioned many times; replacing the dollar with a new North American Currency- The Amero. Once this happens, the implementation of the North American Union will be well underway.

Here is a video of VP Dick Cheney discussing the issue along with David Rockefeller.

Keep in mind I have no political statements to make when I reveal this information to you. I am of the opinion that both political parties are well aware of what is going on without any major opposition. I just don't want you to be the last to know what is happening around you, your country, and the sovereignty of the United States.

To be an astute investor, you must understand much of what is going on around you. Investing is not just about buying the right stock, it is having the ability to see the big picture, and understanding why certain things are happening around you. Without this understanding, you are guessing instead of knowing.

When word of a European Union first broke, citizens of the twenty-seven member states had pretty much the same reaction as you will when the Amero is introduced. Now, of the twenty-seven member states in the European Union, 15 of those member states have adopted the Euro as their currency.

Here in the US there will be a lot of opposition to the Amero. But, as in any other time of extreme economic pain, citizens will be more open to change if that change alleviates pain.

As we speak the US consumer is beginning to feel some real pain. Job growth in non-existent, food and energy prices are spiking, and the availability of credit has dried up. You know our citizens are hurting when lenders created and began marketing Reverse Mortgages to our nations seniors.

The Markets

The major market indexes moved higher last week after the FOMC lowered the Fed Funds and Discount Rates .25 basis points to 2%. Investors focused on the possibility that the Wednesday rate cut may be the last.

Immediately after the cut, the dollar began to rally and oil prices started to drop. The DJIA gained 190 points closing above 13000 for the first time since January. As the Dow moved higher, volume on the NYSE remained subdued which usually isn't a bullish sign. Lower volume rallies shows a lack of commitment from buyers.

Given the intervention by the "Working Group on Financial Markets", every sell-off has been met with resistance. This tells me that investors-speculators-hedge funds may give up on their shorts and possibly drive the markets higher as we go into the November elections.

Politicians, and the powers that back them do some very strange things around election time. Case in point, did you see how the potentially embarrassing issues of the DC Madam were dealt with prior to a big election?

‘D.C. Madam’ commits suicide

The DC Madam's List

Fox News- Gerald Rivera- Alex Jones- YouTube

Alex Jones- YouTube

Do you remember the quote from the movie The Godfather-1972, part one. Michael is walking down the road with Kay after returning from Sicily. He is trying to get her to give him another chance to marry him. She was reluctant and here is how the conversation went.

Michael: My dad is no different than any powerful man; like a senator or president.

Kay: Michael. Do you know how naive you sound? Senators and presidents don't have people killed!

Michael: Now who's being naive, Kay?

Bottom line: Strange things happen during election years. I believe some of those strange things will occur in the oil and commodities markets as well.

Earnings

We are half way through Q1 earnings season. Thus far, 2058 companies having reported and on average earnings are down 19% from Q1-07.

Economic Reports

On Tuesday, the S&P Case-Shiller Home Price Index showed that home prices for the 10-city composite index fell 13.6% in February from a year ago.

The Purchasing Managers Index (PMI) fell for the fourth consecutive month with a reading of 48.3.

Construction spending in March continued to decline dropping 1.1% down from 0.3% in February.

The number of jobs lost in April came in at 20,000, better than the 80,000 reported in March. The consensus estimate was for a loss of 75,000 jobs.

This Week's Economic Reports

Monday- April ISM Non-Manufacturing (Service) Index (previous 49.6).

Wednesday- Q1-08 Productivity (preliminary), previous 1.9%, March Pending Home Sales Index (previous -1.9%), March Consumer Credit (previous $5.28 billion).

Thursday- March Wholesale Trade (previous 1.1%).

Friday- March Trade Balance (previous $62.3 billion).