Housing – not a pretty picture
ReferencePace of Decline In Home Prices Sets a Record, WSJ
Some technology ETFs; CLUB
Being well diversified is the key to long-term investing. If you were not, you probably learned from the recent correction. I began moving towards big, dividend paying, safe companies for some time. As a result, my portfolio is in good shape after the correction. The fact is, though, the economy is slowing and might even go through a recession. It doesn’t mean that there are no good picks. Actually, the best time to buy is during market downturns. Here are some of the stocks and ETF that I’m currently looking at. I think technology is a good place to be in the near future. There is decent growth and the stocks do not look overpriced. I am going to have to pick on technology oriented ETF and invest in it.…
Good Stock: Life Time Fitness
Americans are getting heavier. That's a fact. Companies that deal with that will benefit. Which companies? Good question.Life Time Fitness (, $53), is a "Lexus experience for Toyota price. This is a health-club chain, where members for about $60/month enjoy amenities usually reserved for facilities that charge a lot more: wood panel rocker rooms, yoga, Pilates, pools, care, and day-care centers, and more. They currently operate in Minnesota and Texas, but are expanding to Georgia, Phoenix, and Salt Lake City areas.ReferenceKiplinger's, March 2007 issueRelatedNautilus (), Bowlex maker
Clean Energy ETF
PowerShares WilderHill Clean Energy ()It looks to me like an interesting ETF. I see a lot of activity in the clean energy area, a lot of talk. It looks to me that clean energy is the future and things are starting to happen there."PBW holds 40 companies specializing in the production of clean energy, such as wind and solar power, and hydrogen fuel cells." - Kiplinger's
House Prices – Chart
Contrary to the popular belief, house prices do come down. Check out this historical chart (from '88 to '06), from NY Times.
Sell in May, Buy Back in November
There was an interesting observation in the S&P Outlook recently. Since 1945, in the period from November-April, the S&P 500 returned 7.19%; in the May-October period, just 1.6%. What do do? Sell in May, and Buy back in November! I think this is true this year. I feel like we’re due for a correction. It might be a good time now, especially after the recent records. They recommend doing the following. For May-October overweigh- consumer staples- health care For November – April overweigh- financials- industrials- materials- consumer discretionary- information technology Now that’s an interesting observation… Here's a chart that breaks the returns by month, averaged since 1950.
Investing in ETFs
ETFs are great. They allow you to buy the whole index of stocks with one purchase. I have always like them. But these days, there are new ETFs coming daily. Where should you invest? John Bogle, featured in Barron's has some good advice, I think.Q: Let's say an individual has a million dollars to spend in constructing a stock and bond portfolio with ETFs. What kind of ETFs would you recommend their using?A: First off, we expect that investors should talk with their financial advisers about their particular needs. The basic strategy that we see people using is buying the broad benchmark, so perhaps the Russell 3000 Index Fund (ticker: ) and the MSCI EAFE Index Fund (), which gives you exposure to all the developed non-U.S. markets such as…
Must-Have Web Resources
A great set of links on various topics related to investing. Check it out and select the ones you like. I'm sure you'll find something for you.ReferenceThe Investor's Toolset: 57 Must-Have Web Resources, Ask The Advisor blog (excellent blog, BTW)
Reacting to Market Declines
Excellent and thorough article on a basic, fundamental truth. It's something that I deeply believe in: investing is for the long term. If you think you can time the market, you might get burned out, especially now. But if you can invest for the long term, for at least five years, you'll do well. Simple as that.ReferenceReacting to Market Declines: The Case for Staying Invested, Fidelity Investor's Weekly Newsletter (very good newsletter, btw)
Subprime Meltdown
I'm kicking myself a bit. How come I did not know about the subprime lenders before?! I had been talking about a housing downturn for some time now. However, till last couple of weeks, when the meltdown actually began, I did not know that there were lenders that were doing subprime lending only. Had I known, I would have shorted New Centrury (, almost bankrupt, from $30), Accredited (), Novastar ( and Fremont ().Either way, shorting is very risky. I tried shorting Countrywide (), but I only did it for a day. I chickened out after I read a favorable report on the stock. Countrywide, even though it has the biggest exposure to subprime, is a sound company. Plus, it's already down a lot.Housing downturn has only begun. I am…