My Portfolio...

Posted by: Michael Mandel on December 12

Nobody cares, but….

…I like to try and align my investments with my views on the economy. A year ago I shifted some of my money from domestic equities to international equities, and reported that here on my blog. That wasn’t a bad move.

This morning (after the Fed announcement!) I shifted a chunk of money from stocks (mainly domestic) into money market funds. This reflects my view that we are about to see the end of the long consumer spending bubble, and that the next year may be quite tumultuous for both domestic and international stocks as investors adjust to the new realities.

However, I still maintain my optimism about the medium-term and long-term futures of the U.S. and global economies, so I expect to shift back to primarily equities at some point.

And no, I will not offer individual stock tips.

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Reader Comments

Brandon W

December 12, 2007 11:53 AM

I got all my money out of equities at the beginning of November. I had most of it in financials and energy. My timing turns out to have been pretty good. I doubt there will be any major growth stocks next year. If I were going to get back into the market, going into next year, I'd probably target consumer staples like P&G. With the government enforced switch to HDTV, set-top box makers might be another good place to put some money. Profit from the government using everyone's tax dollars to subsidize their enforced shift to a new format. AAPL is doing well for the holidays, and will have a major product announcement in January; so buying on a low sometime in the next week and riding it out until the day after the January product announcements would probably be a profitable short-term play.

Ben L

December 13, 2007 10:51 AM

My current investment and 401K portfolio is heavily weighted towards foreign funds (to balance my US real estates), since several years ago. I cannot see any structural changes that will improve the outlook for the USA economy and USD (continuing deficit, increasing debt service from the 9 trillion, mortgage resets, continuing credit crunch, fire sale on US asssets). All the news has really been to reduce the probability of recession, not on the structural changes that will put the USA economy on a stronger footing. Net, I am getting into cash, and staying with foreign funds that have minimal co-relation with USA market.

Pete Kusnick

December 13, 2007 11:08 AM

I have never heard of a gambler admitting losses.

Mike Mandel

December 13, 2007 11:57 AM

Pete,

Good point...but you don't get to see my statements

Mark

December 13, 2007 06:32 PM

hmm, what do you think of moving a portion of portfolio to foreign fund like TRAMX? Middle East cash flush region fund.
Money market has a low return so i am loathe to do that, just doesn't feel like the money is working hard.

David Foster

December 14, 2007 10:10 AM

One class of investments that doesn't get a lot of attention is the Master Limited Partnership. MLPs are traded publicly; they typically operate pipelines, oil storage faciilities, etc. Many of them are compensated as transportation carriers, so they don't have to take direct commodity price risk. A bit of a pain from a tax standpoint, since K-1s need to be filed for each, but there are also benefits in terms of tax deferral. Some of these MLPs seem to be relatively low-risk investments with good yields and some capital appreciation potential.

photoncourier.blogspot.com

F X

December 14, 2007 12:33 PM

I like it...a lot of hot air but no evidence.

LARichard

December 15, 2007 04:36 PM

From stocks into money market funds, eh? After the Feds dropped the rates money market yields are dropping. Why do want to lose money? If you are concerned about stocks - even though there are strong buy indicators for certain sectors, there are many options preferable to money markets. Timing the market? Back to the gambler's statement. you look too young to be retired and living soley off your stock yields.

Mike Mandel

December 17, 2007 09:03 AM

Too young? I wish....I turned 50 this year.

And yes, I'm timing the market. My strength, as a financial and economic journalist, is identifying trends before they become conventional wisdom. That sounds a lot like timing the market.

Kartik

December 17, 2007 11:49 PM

The S&P500 tested 1410 twice - August and November. I want to see it break that barrier and get all the way down to 1350 (about 6% lower than it is now). At that point, I would be comfortable going in long and heavy.

drcharles

December 18, 2007 11:29 AM

The European Central Bank has issued
$500 billion in loans to the international banking community. The rationale for this move is to counter the $452 trillion in derivates that the international banking community has created in the marketplace. The problem is one of a deflationary 5 year period to correct the interest rate derivates that have to be marked down in the banking and investment community. The deflationary investment strategy is the key move now which means new stock sector leadership in the area of industrials, health care,
technology and cash rich companies. These large caps can make you some money! The fundamental problem with the credit meltdown has to do with the derivates market which has used a vertical integration from the (1) mortgage consumer; (2) mortgage broker;
(3)Bank holding the mortgage; (4) Bond security creators Freedie Mac, et.al;
(5) international banking interest deriviate creators; (6) investment bankers, Goldman Sachs, et.al and
(7) the institutional and foreign investors. The brillant plan to create a vertical integration of these markets based on interest deriviates was suppose to create a trillion dollar bonanza. However, the Shiller paradox
created a collateral deflation. This is the essence of the problem? The answer is liquidity and 23 year
inflationary cycle.

Joe Cushing

December 19, 2007 11:38 PM

I have low interest debt. I've been trying to decide between paying it down and going into downturn stocks. If people quit buying cars, autoparts stores will do better. Dollar stores will do better in a downturn too. I think I'll just pay the debt though. With the housing crunch, I think my Mortgage is just a little upside down. I think that is the debt I am going to pay in case I want to leave Michigan to find better work next year. Will there be work to find in other states next year or is the rest of the country going to be catching up to Michigan's unempoyment?

Thank you for your interest. This blog is no longer active.

 

About

Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.

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