Outlook for August 2018

August already?! This year is running by. Interesting times in the market. Looks like the two of FANG darlings have fallen into correction/bear market territory (Facebook and Netflix), which I think is just the start of things. The correction in Facebook should be a reminder that investment mood changes on a dime in the market. The share of overall market by the big 5/6 tech companies comprises a big share of the pie, something that has sent me running for the hills for the better part of the year.

Outlook for August 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). The overall sentiment in the sector has been turning bearish as the US$ continues gaining strength. I expect this will shake the weak hands and will provide even better investment opportunities if you can stomach the volatility.

I am not actively looking to add to the sector, but if a screaming buy does show up, then I may actually add to my positions.

Other than that, I am happy sitting on my current positions and let the market play out. As of Jul-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.

Full Disclosure: Our full list of holdings is available here.

7 thoughts on “Outlook for August 2018

  1. hey Road interesting take.

    Its crazy how big the fanng stocks have become. A big pullback in one can drastically drop the overall market sentiment.

    With all these new tariffs and whatnot its surprissing to see the market continue chugging along to new highs.

    some precious metals companys are definately getting tempting to buy.

    cheers

  2. Our portfolio doesn’t appreciate pull backs or corrections but know it is necessary part of a healthy cycle. We simply choose to look at the positive side, which is value is much easier to find. So we use these times, if this is the start of one, to building our family’s dividend stock portfolio. After all, we are in it for the long haul, losses from corrections are simply paper loss while we continue to collect the dividends. 🙂

    Thanks for sharing. Regards. AFFJ

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