Given all that has happened to the
economy, Dow 10000 shouldn't come as a surprise to anyone.
For several months we have been riding the inflation wave with investments in
Agriculture, Energy, Staples and Commodities. In the months ahead, I believe the
leaders in the market place will eventually correct, and become laggards.
Here are the leaders that I feel are over extended, and due for a sharp
correction;
Bonds
Commodities
Energy
Foreign Currencies
Dollar Bear
funds
Metals & Mining
I have taken profits in some of the above holdings, and have added exposure
to the laggards which are;
Banking
Home Finance
These are controversial picks, and I expect to hold these positions for at
least the next 2-3 years. Looking forward, I believe the upside in these sectors
are huge.
For the week:
-Gold closed
at $903.60/oz +30.60 for the week. Last week gold closed at $873.10, and was
trading at $899.00 two weeks ago.
-The Commodities
CRB Index closed at 455.38, up from 445.87 last week, and up from 441.51 two
weeks ago.
-Crude Oil
closed at $135.36/bbl down from $135.47 last week, and up from $138.54 two
weeks ago..
We need to see $75-$85/ barrel oil in the weeks ahead to get the economy back
on track. Oil has remained above $100 for fourteen consecutive weeks.
-The U.S.
Dollar closed at 73.05 down from 74.13 last week, and down from 72.38 two
weeks ago.
Some believe the rate cuts have come to an end, and the dollar is attempting
to rally. A strong rally in the dollar will help drive energy prices lower.
Our current asset allocation is as follows;
70% Equities: (Normally 95%) Aggressive
60% Equities: (Normally 80%)
Moderately Aggressive
50% Equities: (Normally 60%) Moderate
30% Equities:
(Normally 40%) Moderately Conservative
10% Equities: (Normally 20%)
Conservative
