The dog days of summer are here. Here in Ottawa Canada, we’ve been setting records of sweltering heat…on Canada Day (July 1st), we hit 47°C with humidex!! More importantly, the hot stock market in the US continues its streak with no letdown in sight. While Tech grabs all the headlines, its the Consumer Discretionary that topped the returns for the first half of 2018. The following return charts are courtesy of Novel Investor.
Outlook for July 2018
My portfolio’s exposure to the Materials sector had crossed the 50% mark earlier this year, and I decided that I had to pull back and start selling some of my positions in order to manage my risk exposure. Even after a few sales over the past 2-3 months, the increased returns keep my portfolio close to 50% mark (see the stock diversification chart below) and I will be looking to taking more profits in coming months, while maintaining an overweight position to the sector.
50% is a line I have drawn in sand that I do not want to cross when it comes to exposure to a single sector of the market. There are still some good finds elsewhere as the market re-prices equities and we go through multiple contraction as the bond yields rise. I will be looking to diversifying my portfolio further in the coming months while maintaining a healthy cash position.
I also had a couple of my positions closed in May after the covered call options expired and got called away. I managed to book some healthy profit on that front, so can’t really complain.
As of Jun-30-2018, 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.
Full Disclosure: Our full list of holdings is available here.