what is your asset allocation?

[Raybyrnes]

CA Munis offer another level of tax free returns. For high net worth individual it would be extremely difficult to go outside the state and get better returns without taking on a significantly higher amount of risk.

[mixxalot]

I do a mix of 75% stocks (10% international/emerging markets index funds/65% mid of S&P big, mid size, small cap index funds) and rest in bonds, REITS, treasury bills, cash reserves. I do it long term for retirement hopefully my asset allocation can weather the storm by diversification. It is aggressive but I have 30 years until retirement. I think the key is rebalance annually and have balance mix of investments.

[an]

Hey cyphire, thanks for the warning. However, I’m well aware of the possibilities. That’s the amazing thing about stocks, I can pull out on any given day if I feel the fundamental changed. Although I invests in Asia and Latin America, they are mostly large/mid cap value. Only time will tell if what happen here will affect the rest of the world as some predicted. My belief is more in line w/ Peter Schiff. I think you’ll get hurt most if you blindly invest without considering the opposite side. So, I’ll be ready to lock in my gain if my stop loss kicks in. I’ve bought these mutual funds awhile ago, so I have enough gain to be happy with even if my stop loss kicks in.

[Ash Housewares]

Here’s an article which postulates that the boom-panic-boom-panic we’ve been seeing recently may continue for several decades.
http://articles.moneycentral.msn.com/Investing/JubaksJournal/HowToRideTheBoomPanicCycle.aspx

If this is true, then simply waiting out this storm with cash on the sidelines may not be such a great idea. You could be waiting a long, long time for things to stabilize. For most investors (non pros, especially with long time horizons) the implication is that it is better to remain long in equities but become diversified.

[cyphire]

I don’t get it….

I understand about re balancing, but why?

If we are going to have a recession – then the market will swoon. Period. If you believe that there is more potential good news than bad over the next year, then rebalance by all means….

If you believe that the housing market has just begun to have an impact on the economy, and if you believe that the party is over for profits in the large caps (as the economy cools, the profits will shrink), the p/e’s get higher, the market dips and stays down for a while. Then get out….

You can always buy after a couple of thousand points get shaved…

p.s. The DOW was between 8K and 10K in 2003…. That was a period of intense earnings… Why do you think it couldn’t go back to 10K… 9K… 8K????

[Coronita]

I don't know about the rest of you, but as I've been saying for the past couple of months, regardless of this mortgage mess, there seems to be a resurgence in the tech sectors. Companies in the bay area are staffing up again (more head hunter calls to me on a daily basis). And, talking with others in the industries, strong companies have been spending a lot on upgrading hardward/software/services. We've spend a couple of tens of million just last quarter in development only (excluding operations, support,production). Namely because, tech budgets at companies have been cut so long that the infrastructure has not choice be to be upgraded. The general state of some of these tech companies seem to confirm this.

Some news over today and early last week seem to confirm what I'm seeing.

Hopefully, Tech is Back in Black 🙂

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Intel Raises 3rd-Quarter Revenue Outlook Amid Strong Demand

SANTA CLARA, Calif. (AP) — Intel Corp., the world's largest chip maker, raised its third-quarter revenue outlook on Monday due to stronger-than expected demand for its microprocessors.

The company now expects revenue between $9.4 billion and $9.8 billion, up from its previous range of $9 billion to $9.6 billion.

Analysts polled by Thomson Financial expect revenue of $9.4 billion.

Gross margin percentage is expected to be in the upper half of the previous range of 52 percent, plus or minus a couple of points.

Intel is scheduled to report its results for the quarter on Oct. 16.

Shares rose 8 cents to $25.55 in premarket trading.

—————————————–

TAIPEI, Sept 10 (Reuters) – TSMC (2330.TW: Quote, Profile, Research) (TSM.N: Quote, Profile, Research), the world's biggest contract chip maker, posted an 8 percent annual rise in August sales and raised its third-quarter sales forecast on Monday, showing further improvement in the chip sector's recovery.

The annual gain lagged that of smaller rival United Microelectronics Corp (UMC) (2303.TW: Quote, Profile, Research) (UMC.N: Quote, Profile, Research), which on Friday posted a 10.8 percent annual rise in August sales amid growing demand for new computers and consumer gadgets.

 http://www.reuters.com/article/marketsNews/idUKTP3165020070910?rpc=44

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), which sells most of its chips to clients in the United States, including Texas Instruments Inc (TXN.N: Quote, Profile, Research), had unconsolidated sales of T$29.20 billion ($882 million) last month, up from T$27.00 billion a year ago and T$28.77 billion in July.

http://www.thestreet.com/_yahoo/newsanalysis/techhardware/10378599.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

—————————————–

I personally can attest this next article hits one of the growing issues, as the software industry is moving to a SAAS (software as a service).

Networks Driving Data Storage Growth By Daniel Del'Re TheStreet.com Staff Reporter 9/7/2007 6:25 PM EDT Click here for more stories by Daniel Del'Re

 

SAN FRANCISCO — The generally staid market for data storage is starting to quake as tech titans wrestle for a share of this fast-growing tech sector.

Storage firms are seeing demand for their wares increase as more companies use storage networks rather than standalone units. These networks are replacing the typical arrangement of having an individual storage device back up a single server so data is accessible even if a server fails.

Storage networks are also gaining popularity among companies using virtualization software to improve the efficiency of their servers.

In the second quarter of this year, the networked storage subset of the data storage market grew 13% to about $3.1 billion, more than twice as fast as the total storage market, according to data from IDC.

"We're seeing a strong shift to the networked concept of storage," says Vasu Kasibhotla, an analyst with asset manager Trilogy Global Advisor. "We expect that trend to gain moment in next few years."

—————————————–

http://biz.yahoo.com/ap/070906/national_semi_outlook.html?.v=1

National Semiconductor Expects Sequential Sales Growth for 2nd Quarter

SANTA CLARA (AP) — Chip maker National Semiconductor Corp. said Thursday it expects fiscal second-quarter sales to grow 4 percent to 7 percent sequentially.

The company posted first-quarter revenue of $471.5 million.

Analysts polled by Thomson Financial are expecting sales of $495.9 million, a 5 percent increase.

Shares rose 13 cents to $26.63.

[kewp]

I don’t know about the rest of you, but as I’ve been saying for the past couple of months, regardless of this mortgage mess, there seems to be a resurgence in the tech sectors.

Quite a few people, myself included, feel we are currently experiencing a ‘Web 2.0’ bubble. See:

http://www.google.com/search?q=web+2.0+bubble

I suspect this is creating an artificially high demand for underlying tech services. I also suspect it to end how these things usually do.

[(former)FormerSanDiegan]

FormerSanDiegan…. Just because you look long term (something I haven’t been famous for) doesn’t mean that you just rebalance. Head for them thar hills dude!

Thanks for the advice, but I prefer to buy low, diversify, and never (completely) sell.

[cyphire]

I understand FormerSanDiegan…. I see this market going sideways for a couple of years or down dramatically. I don’t see it going up. Thats why I would not be in stocks right now. But I understand your position. If I wasn’t worried about a long downtrend I wouldn’t sell either… But as I am, I think that you will lose 5-20% of your portfolio over the next year.

p.s. I don’t have a crystal ball and good luck!!! I could EASILY be wrong.

p.p.s. Glad you have stop orders Asianautica!

[(former)FormerSanDiegan]

But as I am, I think that you will lose 5-20% of your portfolio over the next year.

Yep. If US stocks drop by 50%, I’ll lose up to ~25% of my portfolio.

[Raybyrnes]

10 year cycles tend to say that there is a lot of upside in the last 2 year of the decade. Just a pattern. Would have nice to have bought into the market in 1997 and sold in 2000.

[Ash Housewares]

For those with time on their hands, this site will analyze your investment portfolio in terms of how risky your positions are for the return you’re getting:

http://www.riskgrades.com

You can get a free membership and run all kinds of “what if” scenarios with your portfolio. It will show much diversification is lowering your risk, all kinds of other things. Good for paring down the riskier positions in times like these.

[capeman]

I am 50% long in what I believe are undervalued (my opinion) stocks and 50% short in turd stocks that will likely be BK shortly. Then I shall roll the short positions into longs in what will be even more undervalued stocks.

[Author]

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