I am spending a lot of time on the road. Last week I was in Ft. Myers, Jackson, Mississippi, and just returned from Baton Rouge, Louisiana. I expect this schedule to continue until mid-July, and then I hope to park myself somewhere up north for the remainder of the summer.
As a reminder, I am posting the DG ETF and Fidelity Fund Portfolios in the "Journal" each week. Our viewing numbers have risen dramatically as over 250,000 people view our website each month.
I hope to sell ads for the website as this would keep the service free for all that are interested.
Dynamic Growth: ETF Portfolio
NEW BUYS:
None
NEW SELLS:
None
Here are our Top 10 ETF's for the week of June 16th:
1) FXF: Currency Shares Swiss Franc Trust- .414
2) SLX: Market Vectors Steel Index Fund- .433
3) EWZ: Brazil Index- .398
4) EEB: Claymore ETF BNY BRIC- .390
5) DBA: Powershares DB Agriculture Fund- .441
6) ADRE: BLDRS Emerging Markets 50 ADS Index Fund- .253
7) DUG: Ultrashort Oil & Gas Proshares- Not Rated
8) PGJ: PS Golden Dragon China Fund- .156
9) KBE: KBW Bank ETF- Not Rated
10) IYF: iShares Dow Jones US Financial Sector- Not Rated
Here are our Top 10 Fidelity Sector Funds for June 2008
1) FSENX- Energy
2) FSCHX: Chemicals
3) FDFAX: Consumer Staples
4) FSMEX: Medical Equipment
5) FSCGX: Industrial Equipment
6) FSDAX: Defense & Aerospace
7) FWRLX- Wireless
8) FCYIX: Industrials
9) FSRBX: Banking
10) FSVLX: Home Finance
Honorable Mention (Holds):
None
The Week in Review:
I would like to start this weeks review by saying my thoughts and prayers go out to the family of Tim Russert who was the lead anchor on Meet the Press. I did not know Tim, but he seemed to be a genuinely nice guy who did his job without any political bias. He was one of the very few journalists who I feel had the best interests of the country at heart while doing his job.
As we speak Tim is probably interviewing Ronald Reagan in heaven. I wonder what Ronnie has to say about what is going on nowadays?
Last Week:
For several months we have been riding the inflation wave with investments in Agriculture, Energy, Staples and Commodities. In the months ahead, I believe the leaders in the market place will eventually correct, and become laggards.
Here are the leaders that I feel are over extended, and due for a sharp correction;
Bonds
Commodities
Energy
Foreign Currencies
Dollar Bear funds
Metals & Mining
I have taken profits in some of the above holdings, and have added exposure to the laggards which are;
Banking
Home Finance
These are controversial picks, and I expect to hold these positions for at least the next 2-3 years. Looking forward, I believe the upside in these sectors are huge.
You may be wondering why I believe a correction is on horizon for the "stuff" stocks, in particular commodities.
Prior to his attendance at last weeks Bilderberg conference in in Chantilly, Va., Federal Reserve Chairman Ben Bernanke voiced his concerns at the International Monetary Conference in Barcelona, Spain.
Video of Uncle Ben leaving the Bilderberg meeting in Chantilly, Va.
Bernanke said;
“We are attentive to the implications of changes in the value of the dollar for inflation and inflation expectations and will continue to formulate policy to guard against risks to both parts of our dual mandate,”
This tells me that the Fed Chairman has seen enough, and is now ready to tackle the inflation issue. The first step is to stop lowering interest rates. The second step is to "talk" of higher rates, and the third step will be to raise interest rates.
All three of these steps will cause a sell-off in Bonds, Commodities, Energy, Foreign Currencies, and Metals while providing fuel for the US Dollar.
If you don't believe there is a sharp correction on the horizon for the "stuff" stocks, check out this little tidbit of information.
88% of the world’s commodities are traded in U.S. dollars, and as the dollar weakens, the price of commodities rise. Since the U.S. dollar has lost more than 25% of its value against most major currencies, the value of these currencies have risen as well.
Just since 2002, the U.S. dollar has dropped more than 40% against the Euro and 26% against the Japanese Yen.
Since I do not believe the US Dollar is on the verge of collapsing, the pendulum has swung to enough of an extreme to be viewed as a bubble. Something has got to give, and I believe the dam of extreme optimism in commodities is coming to an end.
Too many speculators and investors have piled in on the energy and commodity train. These investors are convinced that the bull market in "stuff" is here to stay, and the ride will be long and profitable. It is this kind of assurance in conventional wisdom that makes me want to run in the opposite direction.
Bilderberg Meeting Notes & Pics
Presidential hopeful Barack Obama just happened to be at the Nissan Pavilion, a large outdoor amphitheater, a stone’s throw from the site of this year’s Bilderberg meeting. Did he attend?
U.S. Press- Sorry, no coverage available.
For the week:
-Gold closed at $873.10/oz -25.90 for the week. Last week gold closed at $899.00, and was trading at $891.50 two weeks ago.
-The Commodities CRB Index closed at 445.87, up from 441.51 last week, and up from 422.17 two weeks ago.
-Crude Oil closed at $135.47/bbl down from $138.54 last week, and up from $127.35 two weeks ago..
We need to see $75-$85/ barrel oil in the weeks ahead to get the economy back on track. Oil has remained above $100 for fourteen consecutive weeks.
-The U.S. Dollar closed at 74.13 up from 72.38 last week, and up from 72.86 two weeks ago.
Some believe the rate cuts have come to an end, and the dollar is attempting to rally. A strong rally in the dollar will help drive energy prices lower.
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
