SmartMoney Mid-year Forecast

[Spanky]

SmartMoney's mid-year forecast is as follows:
1. Large Cap growth is undervalued and thus is poised for a comeback.
2. Small cap will stay flat.
3. REITs is heading for a decline as interest rate continues to rise.
4. Funds specializing in Asian stocks will outperform.
5. Health care funds will continue to prosper as demand for health care continues.
6. Energy stocks will remain strong for the long term despite their recent runup.

The magazine also recomends a couple of stocks: Cisco and Wells Fargo.

Based on this forecast, we should reduce holding of REITs and small cap and increase holding funds of health-care, emerging markets, large-cap growth, and energy (as price becomes more reasonable).

Cheers.

 

[cute fuzzy bunny]

I get smartmoney for two reasons. Its free and its good entertainment.

Many of their suggestions have not borne fruit. A while back they said to run away from all bonds except very short as they were about to collapse. Which hasnt happened yet, but might. About 3 months or so ago they said to run away from all junk bonds...this most recent issue said that money was flowing into junk bonds like crazy and that this wasnt a bad idea.

By the way, I think it said to dump emerging markets as they would be bad investments for the near term.

My own opinion is that buying growth stocks into an environment where the majority of surveyed CEO's expect declining earnings and where we're 3+ years into an economic recovery is about the worst advice I've heard lately.

 

[Spanky]

TH,

Thanks for your insight. I guess we cannot rely on the media for advice.

Spanky

 

[wildcat]

Errrr I try to avoid predictions b/c it makes me look bad. A loser's game if you will. Almost like a market strategist. Nothing wrong with a little extra weight on a particular sector or style with some slice and dice money. Still say large value and foreign are some of the better investments if I had to make a prediction. Large co's are flush with cash and I think we have a better chance at seeing nice dividend increases in that area + foreign weight is a play on a weakening dollar. Both will prob come back to haunt me in a later thread

 

[HFWR]

SmartMoney's mid-year forecast is as follows:
1. Large Cap growth is undervalued and thus is poised for a comeback.
2. Small cap will stay flat.
3. REITs is heading for a decline as interest rate continues to rise.
4. Funds specializing in Asian stocks will outperform.
5. Health care funds will continue to prosper as demand for health care continues.
6. Energy stocks will remain strong for  the long term despite their recent runup.

1. BS; valuations are lofty, and any "outperformance" is already "baked in the cake".
2. No opinion, but I'm invested in Russ2000 (10%), and SCV (10%).
3. Everyone who has proclaimed this for the past 2-3 yrs has been wrong. They may eventually be right, say 1-2 yrs form now, but I'm staying in REITs (US/intl) for the diversification and the divvies.
4. Have EAFE and EM, so I hope so!!
5. Possible; been in the back of my mind to investigate some overweighting this sector, but haven't yet...
6. Though about this, and probably would if divvies were better. May be yesterday's news.

No bull sperm was harmed in making this post...

 

[laurence]

You know, I still don't have any REIT's. Once again, my ignorant self would like to call on the collective wisdom of the board for advice on a good REIT vehicle. Would prefer an ETF style investment. What percentage of portfolio are y'all holding in this?

And to be somewhat on topic, do they reall think we should reduce REIT holdings, or be in a hold vs. buy mode?

Also, as a foot soldier, I wouldn't buy Cisco. My network engineers are underwhelmed by their latest offerings, and competition is looking better all the time. I know they have 90%+ of the network backbone market yada yada, but we are not buying up bandwidth at near the spead we used to, despite doubling our staff nationwide, and when you already hold almost all the market, and the market's growth is planing, and competitors are coming on line.....well, I could be wrong.

 

[brewer12345]

ICF seems to be the cheapest reit etf out there.

 

[wildcat]

y'all

Hey man I thought you were from Cali ---- y'all

I have been trying to find a solid global REIT fund or ETF but no luck so far

 

[Spanky]

I have not seen any International REIT ETF.

There are however some funds:
The ING Global Real Estate Fund
Fidelity International Real Estate Fund
Cohen & Steers International Realty Fund
http://www.cohenandsteers.com/dynfunds/overview.asp?cusip=17

 

[laurence]

Thanks for the tips!

WildCat, I know, it's funny, but I actually made a concious decision to incorporate that phrase into my vocabulary. It's just so efficient, regional overtones be darned!

It does jar people to hear it come out of my mouth - I believe the phrase is consonance/dissonance?

 

[unclemick]

I still can't pronounce y'at properly - dam Yankee forever I guess.

YAT's are New Orleanian's who use the greeting - Where are you at - in all it's forms instead of hello, how are you..

 

[HFWR]

Invested in RWR (US) and IGR (Intl).

 

[Gonzo]

Alpine has an International Real Estate Fund: Alpine International Real Estate Y (EGLRX)

Gonzo

 

[cute fuzzy bunny]

Laurence - with a sandiego house you might be in enough real estate already

I think reits are pretty pricey, but I have for a long time and they keep going up. Not sure if thats good or bad.

As far as media expertise...look at their recommended portfolio in this last issue...they picked 12 stocks. 6 made money, 6 lost money, the net was about a 2% gain during the period watched vs a very small loss for the s&p500...monkeys with darts anyone

 

[HFWR]

Thanks for the tips!

WildCat, I know, it's funny, but I actually made a concious decision to incorporate that phrase into my vocabulary.  It's just so efficient, regional overtones be darned! 

It does jar people to hear it come out of my mouth - I believe the phrase is consonance/dissonance?

Cognitive dissonance?

 

[wildcat]

Spanky and all

Yeah I looked at some of those globals but not all. Theme seemed to be high prem ETFs or high exp ratio funds I have a lot of respect for Third Avenue and its funds. Real Estate Fund is closing if anyone wants to make a mad dash. High exp ratios though. Just can't seem to bring myself to pay it even if I respect the fund shop.

 

[laurence]

Cognitive dissonance?

Darn it! You are right, I was self librarian-izing and the spell checker got me on the run. Doh!

 

[Martha]

I thought you were clever. I like the idea of the term consonant dissonance for mispronunciations.

 

[unclemick]

There is a central difficulty with Smart Money - and all other media of that ilk.

DCA into a broad based low cost index fund in the accumulation phase and the appropriate balanced index when you retire is all many people need.

All that 'other stuff' is to keep hormones happy - has nothing much to do with real investing.

I do have putz money(not to be confused with retirement), occasionally follow sports and read Money, Kip, etc or whatever at the barbershop, dentist, doctor, etc AND the tabloid frontpages if it's a long checkout line at the grocery.

All the the same class - great fun - but nobody takes that stuff serious - it's there for entertainment.

 

[wildcat]

Exactly Unclemick...if people just indexed no mag would sell for the most part. Fewer financial planners to sell crap. Etc etc...sounds like a better world already

 

[cute fuzzy bunny]

Only problem is if everyone indexed and nobody traded, we wouldnt have anyones money to take and returns would stagnate...

 

[wildcat]

The small caps may have a better chance of lagging or at least I don't think I would throw any new money into em. Based on theory, we shoud pay less for small caps b/c it is a riskier class but right now it trades at about the same valuation as large caps, i.e. less risky class.