I made a mistake not investing in oil or energy stocks during the last year — those were the only safe havens this year as Commodity prices rocked more than 25% higher.
The Dow has now dropped 20%, making this an official Bear Market. Brace for another 10%, as Barron’s reported this week that stocks in Bear Markets fall 30% on average. I think Growth Stocks could rise 30% — making my guestimate risk/reward 10% down to 30% up.
Leading stocks are very volatile. That was the worst June stock market since 1930 — the worst first half since 1970. We are due for a big bounce, like April’s when the Growth Portfolio galloped around 8% higher. Sellers of growth stocks in January were suckers.
When there’s fear we should think opportunity. Our plan now is to sell our lower weighted positions and buy the market leaders like Visa (V) and First Solar (FSLR) that have given us this grand buying opportunity. For instance, RIMM was in the 80s in January. It went on to the 140s by June and is now 118.
Many current market leaders are commodity stocks — which have already made huge runs — so the danger in commodities is high. We also must concede this is where the money is being made.
This month we analyze top oil, fertilizer and metal stocks to see if they are worth buying now or if most of the gains have already been made.
