are you unbalanced?

Rebalancing based on Sector weights

· Reviewing and updating

Our Equity portfolio is heavily overweighted in Bitcoin (20%) and currently underweight in financials. Generally, I want to be spread over various sectors at play in the Canadian economy. I am planning to rebalance towards Communications (Comm) and Canadian Tech stocks (XIT). In addition there is the exposure to global and AI tech through some ETFs and stock picks (BotZ).

 

Here’s a detailed look at how the S&P did in 2023.

Rank S&P Sector 2023 Return

1. Information Technology+56.4%

2. Communication Services+54.4%

3. Consumer Discretionary+40.3%

4. Industrials+16.0%

5. Materials+10.2%

6. Financials+9.9%

7. Real Estate+8.3%

8. Health Care+0.3%

9. Consumer Staples-2.3%

10. Energy-4.8%

11. Utilities-10.4%

Dont forget BTC +171% not a sector but definitely something to watch as inflation interplays with Money Supply, Human Innovation, and Technology


Note: Data as of December 29, 2023.

Comparing the S&P to the TSX for Canada more specifically, I'm noting that over the longer term technology outperforms. SO we will maintain a heavier tech weaighting in our portfolio. Comm, Materials, and Utilities are down after one year. A good plan would be to rebalance some tech, healthcare, energy towards the cheaper stocks/etfs.

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So what about the business cycle in all this. Are we in a recession? Coming out of one? WTF?

My brain on. Stocks - I believe we are entering into recovery to expansion and the great thing is ... everything goes up. Reits and Disc/Consumer should do well

 

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As we peak over next several years we will see TECH pull in the lead while in the later years 4-6 years out perhaps we will look to position our stocks for slowdown/recessions.

 

The key is diversification and skating to where the puck (or the stock$$ ) will be. - not where it was.