Wednesday, August 21, 2013

My New Test Portfolio

So, the US 10T has just hit a new high. US equity is going slow. Europe is uncertain and only half of them is doing well. Asia ex Japan is doing shit. Japan is doing their own crazy QE. Emerging markets are getting their currencies raped. Interest rates seems like it's going to rise and statistics point to a global recession within 2 years.

Shit, now if that doesn't sound bad to you, I don't know what does. All the markets seem bad, so equity could be risky. Interest rates are on the rise, so bonds are going to get slaughtered (more). What then, can we do in the face of these big big problems. Money markets and fixed deposits? Commodities? Well, gold does seem to be going up, though it is at a historical high.

Anyway, since I'm obviously no expert, I read a lot to steal other people's knowledge. I like Blackrock. It sounds like an awesome powerful name for a company. Plus, I've been watching their World Gold get slaughtered and literally watched it rise from 5.3 to 6.95 over a course of a month. If that ain't fantastic, then you obviously don't get impressed easily. Anyway, here's the link to a market outlook issued by Blackrock. http://us.ishares.com/content/stream.jsp?url=/content/en_us/repository/resource/market_perspectives_september_2013.pdf

I guess after all my yammering, I'm going to come up with a simple portfolio now, let it weather some Bloomberg tests, and get ready to jump in when the time is right. And of course, dock, duck and hide before 2015 rapes everyone.

1) Low duration bond funds
2) Larger equity allocation
3) Low debt sectors
4) Large cap companies

I've identified low debt sectors to be: Technology, Energy, Retail and Healthcare.

Okay, I'm gonna go get this shit started! I'll update soon!

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