Blogger is acting up today so if there are no more posts, you'll know why.
The real title of this post is Understanding Your Portfolio. If your portfolio has any element of active management (your active management or management you pay for) it will tilt toward certain themes. A day like yesterday tilts strongly to most of the themes I am overweight. Foreign stocks did well, energy did well, materials did well and domestic lagged.
Yesterday the equity portion of client portfolios generally did well. In addition to the above Statoil (STO) was up 5% on the oil news and economic data out of Norway.
Days where the dollar is strong and big US stocks do very well are days that I know the portfolio will lag. One part of the emotion that sometimes goes with owning stocks is a negative reaction on days that you lag. It is that reaction that might cause unnecessary trades to be placed.
A diversified portfolio can not beat the market every day. If the goal is to beat the market over longer periods of time and your themes lag more often than not, that is a signal that some of your ideas are wrong.
Lately, luckily, the days I have lagged have not been more than the days I have lead so for now no big changes. This is the type of thing to keep tabs on, again if beating the market is your goal.
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1 comments:
Hi Roger,
I 1st posted to your blog a LONG time ago (about 6 months)and you had chided me (rightly so it seems) for cashing out because I thought the market would crash :-)
Anyway, I've noticed a recurring theme - and correct me if I'm wrong. You seem to think that Japan isn't the best place to be as far as "Asia" is concerned.
I was looking at CEFs and found one - JOF. Very low price to earnings.
THe premium on this fund is only 2.8%.
Other than sensitivity to oil - why are you bearish on Japan?
I concede that it seems that other Asian markets have more "upside" but I still think that Japan has taken such a beating (with the Nikkei at 40K), it seems like it has a long way to get back there.
Anyway, I'm back in the market now. More focused on commodity plays (PHO, Water stocks, Energy) and
international.
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