jpmontero88 @jpmontero88: "Post about: 2023 Strategy Post Nº:..."

Spain

Edited

Post about: 2023 Strategy Post Nº: 1 Dear Followers & Copiers, I was owing you the post with the Strategy of our Portfolio in this 2023, so here we go: 𝙋𝙀𝙍𝙁𝙊𝙍𝙈𝘼𝙉𝘾𝙀 𝘽𝙔 𝙎𝙀𝘾𝙏𝙊𝙍 I like to track and analize the previous performance of each sector through the years ,by following: Information Technology: $XLK Consumer Discretionary: $XLY Healthcare: $XLV Financials: $XLF Utilities: $XLU Materials: $XLB Energy: $XLE Consumer Staples: $XLP Industrials: $XLI REITs: $XLRE Communication Servicies: $XLC See the attached photo of the performances thorugh the years since 2001 until 2022. In 2022, the only sector that was able to deliver a strong performance during a hard year was the Energy sector (+58%). On the other hand, the great loosers of 2022 were the Companies in the Sectors: Information Technology (-28%), Consumer Discretionary (-37%) and Communication Services (-38%). That explains why the $NSDQ100 underperfm the $SPX500 . The former is almost 70% concentrated in this 3 sectors and also almost no Energy companies (< ~1%), while the latter has only a 39% in the 3 and almost a 6% in Energy. 𝟮𝟬𝟮𝟮 𝙎𝙄𝙏𝙐𝘼𝙏𝙄𝙊𝙉 In 2022, as I commented in many post in the past, we invested heavily in Energy sotcks taking advantage of the situation and the over-valuation I saw in the rest of Sector. Mainly that's why we perform very strongly last year. 𝘾𝙐𝙍𝙍𝙀𝙉𝙏 𝙈𝘼𝘾𝙍𝙊 𝘾𝙊𝙉𝙏𝙀𝙓𝙏 I believe that the current Macro is improving and now many Economist are strarting to explore the possibility that we could have a Soft Landing in 2023. This means No Recession or a Mild recession. The Inflation continues decreasing as expected and looks like it have peaked back in June at 9%. Also the InvertedYield Curve, the leading indicator for predicting future recessions (predicted the last 8 recessions) looks like it could be wrong this year due to the still Strong Labour Market: www.bloomberg.com/news/articles/2023-01-04/pioneering-yield-curve-economist-sees-us-able-to-dodge-recession Adding to that and just as statistical data: in the last 95 years (this means since 1928 till 2022) we have had only 30 Bearish Years (32%) and 65 Bullish Years (+68%). This means, it's more probable to be rewarded by being Bullish than Bearish Also, after this 29 negative years (excluding 2022) the probability of having another consecutive negative year is 28% (we have had 4 periods: "𝑻𝒉𝒆 𝑮𝒓𝒆𝒂𝒕 𝑫𝒆𝒑𝒓𝒆𝒔𝒔𝒊𝒐𝒏" -> 4 consecutive years (1929, 1930, 1931 and 1932) "𝑾𝑾𝑰𝑰" -> 3 consecutive years (1939, 1940 and 1941) "𝟏𝟗𝟕𝟎'𝒔 𝑮𝒓𝒆𝒂𝒕 𝑰𝒏𝒇𝒍𝒂𝒕𝒊𝒐𝒏" -> 2 consecutive years (1973 and 1974) ".𝒄𝒐𝒎 𝑩𝒖𝒃𝒃𝒍𝒆" -> 3 consecutive years (2000, 2001 and 2002) In summary, this events are rare and occur when nobady was expecting them (black swans). For 2023 everybody is predicting a Recession, so... 𝟮𝟬𝟮𝟯 𝙎𝙏𝙍𝘼𝙏𝙀𝙂𝙔 We will rebalancing our Portfolio, reducing investments in the Energy Sector , reducing hedges in Gold and heavily increasing investments in good companies mainly of this 3 sectors (Information Technology, Consumer Discretionary and Communication Servicies), that I believe will outperform the rest of sectors in 2023. Also, China Macro and Economic Situation is considerably improving and many stock and index have broken important resitance this last days. We will be increasing exposure here also. Even though, Macro situation in my opinion is improving sotck prices could continue to be volatile. No one can predict. Nowadys there are many good opportunities in very solid companies that won't last forever. Don't try to catch the bottom! :) Take advantage that we are Retail Investors and can Rotate our Portfolio fast. Cheers, JP