Just some macro-thoughts. Looking ahead.

Crash

I like to think I'm quite adequately diversified, though there are some hefty overweights, when I look at my breakdown. I'm one-third heavier in Financials than the SP500.

Energy: SP500 is a bit over 4%. I'm at 17.02%. Most of that is PRNEX. Actually quite volatile. I don't like that. But I do look forward to the end-of-year dividends from the Monster oil companies. The other elements in this category I'm holding are:
ET. oil/gas midstream. (Pipelines). and TS, a maker of pipes, particularly top-end, seamless quality pipes. Especially with offshore wells, their kind of pipe is preferred, maybe even essential for deep water jobs. I see the company just BOUGHT a pipe-coating outfit, too.

I'm light on Technology, very light in Consumer Defensives.
Utilities: SP500 holds 2.68% in the Index. My portfolio includes 7.31% of total in "Yoots." But I hold no single-stock Yoots. The P/E on all the Yoots I see does not appeal to me at all. I keep watching and hoping, though.
(What's a 'yoot?')



"Higher for longer" is where it's at. I see no Fed lowering of interest rates at all in 2024. Accordingly, what I expect is to collect dividends, while watching the Market, and my own stuff, drift in the doldrums without much movement, unless it's downward movement. ZIRP was a huge exception to business as usual. Are we in a New Normal? Or will we find ourselves back to something like the "old normal" when rates are taken down at last, by the Fed--- MAYBE sometime in 2025?

hank

Thanks for the thoughts @Crash. I like to think I don’t do macro - but I guess we all do to some extent. It’s hard not to let your perceptions about the economy, Fed policy, interest rates, various markets etc. creep in to your positioning.

I see diversification as a defensive tactic. Obviously, those who make the “right” call at any particular time will outperform a more diversified approach. Can’t comment on your current allocation. But hope it works for you as planned.

racqueteer

"(What's a 'yoot?')"

An owl with a lisp?

Mark

@racqueteer - too funny.

hank

Crash

Well, well, well.

After these 6 names appear here in this article, I suppose you can kiss the opportunity goodbye. People will be lunging at these stocks. High interest rates negatively affecting banks and insurance? Not so, so it says here:
https://finance.yahoo.com/news/fed-anticipates-higher-rates-longer-121000821.html

I suppose this sort of piece is what we'd call click-bait. But they ARE making something of a case for the assertion.

WTFC
NECB
OBT
RGA
PRI
RZB

yogibearbull

Too much of a good thing is bad.

There is a saying that one cannot live on cake. This one European queen who said during a famine, what's the problem, no bread? People can just eat cake. - she was deposed not just from her queendom but this world.

So, for years, we heard that banks, insurance companies and pension funds benefit from higher rates. But the rapid rise in rates in 2022-23 revealed rated problems - underwater HTM portfolios that were hidden by accounting rule, and other problems.

But if rates stabilize at higher levels, they will indeed be good for banks, insurance companies, pension funds and SAVERS.

Crash

HTM?

High Trees Mountainous?
Hefty Treadmill Mortgage?
Hello To Mommy?
Hurtful Trigger Mechanism?
Hellish Theatrical Muppets?
Helsinki Trademark Murder?

Observant1

Held to maturity

Crash

+1. Thanks.

sma3

Thanks for update. I too am far overweight energy as it is such a small amount of the SP it is clearly a value play.

I am still trying to decide when to buy long bonds. Many of the professional bond folks, even those who think we are in a prolonged bond bear market ( ie Jim Grant) are looking at that 50% haircut on 30 year Treasuries and thinking it has to have a pop.

Crash

sma3 said:

Thanks for update. I too am far overweight energy as it is such a small amount of the SP it is clearly a value play.

I am still trying to decide when to buy long bonds. Many of the professional bond folks, even those who think we are in a prolonged bond bear market ( ie Jim Grant) are looking at that 50% haircut on 30 year Treasuries and thinking it has to have a pop.

Ugly week and month for bonds. I just stay on the horse through it all. I'm better off now than when I first bought my delicious, wonderful junk bonds. But you're talking about IG and gummint stuff, eh? As I said elsewhere, I'm not expecting much except dividends, until into 2025. If the Fed decides to help out sooner, then great.