@JoeHi Joe,
I am not by any means saying what I do is the right thing for everybody that reads this to follow. But, it is what I do.
Commodities fall in the broad sectors of materials and energy within the S&P
500 Index. It seems that you wish, like me, to target at least five percent of your asset allocation to the materials area. First, I did an Instant Xray analysis of my portfolio to see just how much I hold in the materials sector. Then if I am short I use a commodity or precious metal fund to supplement. The two funds that I currently use to do this are JCRAX and SGGDX. You might wish to do an Instant Xray on each fund to see how they are comprised. Currently, I hold about six percent in the materials sector with JCRAX and SGGDX combined accounting for about only one percent. So, if I sold them off I’d be back to about the five percent targeted base line in materials. I see gold and silver currently as a good long term buy since they are now selling for around, and back of, their all in cost to mine.
Since, materials are now out of favor with most in the investment community this, by my thinking, is an area of long range opportunity. So with this, I continue to target at least five percent to the materials sector and, at times, even more. Hopefully, over the next year, or so, the worm will turn and assets I bought that were out of favor will have appreciated. Know to, it can go the other way. So, I moderate and don’t try to make it all, so to speak, a one position bet on the “come line.” With this, I am also looking at other sectors for opportunity too.
For me there are four minor sectors within the S&P
500 Index. They are materials, real estate, communication services, and utilities. I strive at keeping at least a five percent allocation to each of these sectors. This leaves the seven others as major sectors in which I strive to keep at least a nine percent allocation to each of these. They are consumer cyclical, financial services, energy, industrials, technology, consumer defensive, and healthcare. When done, this leaves about seventeen percent of the allocation that can be positioned based upon how I am reading the markets and wish to position based upon a sector allocation out look.
Currently, I am one percent (overweight) in materials. I am about nine percent in energy and not carrying an overweight at this time. While in healthcare, technology, consumer cyclical, and financials I am three precent overweight in each. In utilities and communication services I am two percent overweight in each.
I hope this has provided you with some helpful insight as to how I position and to my thinking.
I wish you … “Good Investing.”
Old_Skeet
