Three of the best performing sectors year-to-date are health care, consumer discretionary and financials. As part of my Covestor Macroeconomic and Secular Trends portfolio rebalancing activity, I am considering starting a position to best cover some of these sectors and become more diversified.
My goal is to use a handful of stocks to represent the broader market and secular trends. Here is my current coverage:
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- Chipotle (CMG) Consumer discretionary – restaurant Healthy, responsible food trend
- Consumer discretionary – restaurant
- Healthy, responsible food trend
- Terra Nitrogen (TNH) Basic materials – fertilizer Inverse play on natural gas
- Basic materials – fertilizer
- Inverse play on natural gas
- Verizon (VZ) Telecommunication services Mobile devices and internet trend
- Telecommunication services
- Mobile devices and internet trend
I plan to include the following industries and trends soon to help diversify:
- Health care Aging population Government policies
- Aging population
- Government policies
- Financials Potential opportunities from Federal Taper
- Potential opportunities from Federal Taper
- Energy Shale boom and energy independence
- Shale boom and energy independence
Maintaining a diversified portfolio is important to mitigating negative risks and unexpected turns. Adding 2-3 new positions will potentially double my diversification and still keep the number of positions in the portfolio small and manageable.
The investments discussed are held in client accounts as of July 31, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.
The post On the hunt for health care, financial and energy positions appeared first on Smarter InvestingCovestor Ltd. is a registered investment advisor. Covestor licenses investment strategies from its Model Managers to establish investment models. The commentary here is provided as general and impersonal information and should not be construed as recommendations or advice. Information from Model Managers and third-party sources deemed to be reliable but not guaranteed. Past performance is no guarantee of future results. Transaction histories for Covestor models available upon request. Additional important disclosures available at http://site.covestor.com/help/disclosures.