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.
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
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.