Seems like the year 2018 just started, and we are already in February?! Time sure is aflyin’. Time to look at what the markets are doing and present my outlook for February 2018. Things seem to be getting interesting now. The stock market has continued its climb with some great returns just in the first 30 days. However, the last few days saw some bloodletting that was interesting to note.
As I mentioned in my Outlook for 2018 post, the US$ will be the most interesting asset to observe in the investing universe. The moves are already pretty apparent as the slide has accelerated during the first month of the year. The US budget deficits are getting more media attention, the US government saw a brief shutdown — only to kick the can down the road for a short while, interest rates are rising while the currency is sliding — the US market is behaving like an emerging market!! These are interesting times, no doubt. I will be keeping a very close eye on the US$ and continue to position myself to protect my purchasing power as the world’s reserve currency continues down the devaluation path.
Outlook for February 2018
With the slide of US$, we can expect to see asset prices starting to inflate. Assets such as stocks have already been inflated over the years, but there are still some laggards – i.e., commodities. The following chart has been shared by plenty of folks in the past, but Jeff Gundlach just re-presented this calling it the Chart-of-the-Year, showing that commodities haven’t been this cheap relative to other financial assets.
While some commodities, esp base metals have had a stellar year in 2017, others such as precious metals have lagged. I expect precious metals to start rallying sooner or later as inflation takes hold, so I am happy to sit on my portfolio of gold and silver miners that will see tremendous tailwinds when their underlying asset prices increase.
While my overall portfolio is overweight in Basic Materials sector, I am looking elsewhere to deploy cash. The other related fields that I find interesting and provide opportunity include Energy, REITs, and the cryptoasset market. In addition, I will be looking to make a few moves to align my portfolio as outlined in my Goals for 2018.
As of Jan-31-2018, our overall portfolio diversification is structured as shown below.
Looking for investment ideas? Check out this Top Investment Picks for 2018, where 35+ bloggers present their top pick and a reason to invest in those securities.
What are your thoughts on the points mentioned above? Do you have any specific thoughts on the markets and looking at anything interesting? Share with a comment below.
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