Kenneth Portfolio 20210328
Summary
- Rationale.
- Portfolio.
- Exit FB, LHX.
- Added TAN, KRE.
- upgraded EV, renewable to Overweight.
Rationale:
Ideas:
1. The 1.9 trillion covid-19 relief plan will dramatically increase the risk for inflation to go up rapidly.
2. It's more likely interest rate will go up rapidly because of the inflation expectation(will be >2% soon) and recovery.
3. Global recovers will not be in sync, but the US and developed EU will recover after the majority get the vaccine, relief will accelerate the US recovery speed, we should focus on regions/sectors that benefit from the recovery.
4. Risk also increases dramatically for commodity price to sky rock in 2021.
5. Biden administration will push for the 2 trillion clean energy and infrastructure package.
Risks:
1. Number one risk now: inflation and interest rate will rise sharply
2. Commodity price might skyrocket.
3. Recovery from the pandemic is longer and more difficult globally, also due to the new virus variants.
4. Equity bubble is on the horizon.
5. Relationship to China.
Game plan:
Market will start to focus on the infrastructure and green-energy spending plan
In general, a rising rate in the early recovery stage actually favors, but when the rate rose so dramatically, the market will be volatile, we will need to be patient and add to our position when a big dip happens.
The tech equity market bubble might burst due to rising rate, need to watch it closely.
Sectors to focus on:
Overweight on consumer services/financial, Commodity, REIT, Infrastructure, renewable, EV
Equity weight on 5G, finTech.
Warning: Should reduce or exit bond position
Stock Portfolio:
WFC, C, DAL, LUV, CCL, NCLH, DIS, AAPL, MSFT, FB, MU, HCA, OXY, FANG, MRK, QS, LHX, BA, SLG, PCG, V, PYPL
Stock Watch list:
STNG, VALE, LVS, BMY, WMT, BXP, TMUS, QCOM, AEP, AA, GE, HAL, CMA, AIG, X
Stocks considering to exit:
ETF Portfolio:
VNQ, REZ, REM, XLE, OIH, PEJ, JETS, ICLN, SRVR, TAN, KRE
ETF Watch list:
EWW, EWZ, VNM, EWU, IBB, XLB, KBE, KIE
Analyst's Disclosure: I am/we are long LUV, TAN, KRE, OIH, VNQ, WFC.
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