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The Investment Contrarian
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Jerry B. Wade is founder and President of Wade Financial Group, Inc. (WFG) and has been since its inception in 1994. WFG is an independent advisory firm in Minneapolis, Minnesota, which provides comprehensive financial planning, tax planning, investment management and estate planning for high... More
My company:
Wade Funds
My blog:
The Investment Contrarian
  • Ideas For Fine Tuning Your Asset Allocation 0 comments
    Aug 19, 2009 9:13 PM | about stocks: XLP, DWX, WPS, GSC, DBC

    At my firm, Wade Financial Group, we are in the process of “taking some chips off the table” across our various model portfolios based upon the enormous 40-70% bounce off the March market lows.

    We manage a “Completion” strategy that serves as a global diversification complement to our U.S. only individual stock model and DCS Combination models.  This strategy has gained 24.8% (net) YTD as of 8/17/09. As comparisons, the S&P 500 is up 10.5% and Foreign (NYSEARCA:EFA) 20%.  The model is typically approximately 70% U.S. and 30% Foreign, making our results for 2009 far above the benchmarks.

    Below are the major components of the strategy and current changes that are being made.  The securities that are being reduced/sold were contrarian picks that were added when the market was much lower in an effort to take advantage of the market upturn that has taken place.

    All 2009 YTD performance numbers are as of 8/17/09:

    U.S. stock funds/ETFs

    • Sold Midcap Growth (NYSEARCA:VOT): up 21% vs. S&P 500 10.5%
    • Added new Consumer Staples ETF position (NYSEARCA:XLP)

    Foreign stock funds/ETF’s

    • Foreign Dividend ETF (NYSEARCA:DWX): Up 39% vs. 20% for EFA index
    • Have reduced by 50%
    • Added to existing Foreign index based fund (MUTF:DFIEX) and to a Global fund (MUTF:SGENX) that is conservately managed

    Emerging Markets funds/ETFs: Up 49% ytd vs. 42% EEM index

    • Have reduced by 20%

    REIT funds/ETFs

    • Foreign REIT (NYSEARCA:WPS): up 32%
    • Have reduced by 60%

    Commodity funds/ETFs

    • Reduced by 25%. 
    • Now own three Commodity ETFs (GSC, DBC, PCRIX) vs. one for additional diversification

    Investing lessons:

    Global diversification still makes sense, but keen attention must be paid to various sectors as they go both “on sale” or become “overpriced”.

    Disclosure: Long XLP, DWX, DFIEX, SGENX, WPS, GSC, DBC, PCRIX

    Stocks: XLP, DWX, WPS, GSC, DBC
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