Suggested Stocks Portfolio Selection 2018

For those trading securities, holding stock, or experimenting with alternative investment strategies, then 2017 should have been a very profitable for you. The S&P500 and S&P1500 ($ITOT) gained 20% this year and the bears are waking up and warning of an imminent pullback and possible recession. I covered recently the importance of factoring in a market neutral strategy for passed months, however markets continued to rally ever since the publication and repeatedly beat all time highs.

It’s difficult to gauge whether the market has been deprived of all it’s fruit or not. Investor sentiment remains positive, but many asset classes have been overvalued and – frankly – overhyped. However, the are still segments of the market that aren’t oversaturated, where investors have simply been distracted by other events, or simply haven’t been fully affected by the newly passed government legislations. President Trump’s tax reform and the FCC net neutrality repeal will play into market movements in 2018, and on the other side of the pond MIFID II has yet to come into effect.

Selection for 2018

In 2017, pursuant to a more aggressive market strategy it wasn’t alarming to balance one’s portfolio heavily in equity holdings, but going into the new year hedging one’s asset risks will go a long way. I also believe it is an important time to reduce large-cap growth weight, as well as manage your ETF selection with a bit more care. Owning shares of Facebook ($FB), Alphabet ($GOOG), and Amazon ($AMZN), and SPY simply won’t cut it and will expose you to a lot of risk. In fact, next year I would hesitate to invest in FANG stocks (shoutout to Mr. Cramer). As an extra step in mitigating exposure risk I’ve also been considering several closed-end funds from different sectors that would help diversify my portfolio.

I have compiled a list of assets that I consider should perform well. Many of the assets listed serve as hedges for riskier securities and safety nets in case the market decides to take a dip. Additionally, as per the norm my asset selection weighs heavily in biopharmaceutical stocks, with several companies coming from outside the U.S.

It is important to note that several of the companies presented are complete wildcards when compared to more traditional asset choices. What is $ACBFF to $PFE if not a shot in the dark? How will $GILD manage their revenue stream? Will $INSY recover from its tumultuous 2017 legal ride? We will have to wait to see what 2018 will bring.

Individual asset selection summaries with DD to come. 

 

One Reply to “Suggested Stocks Portfolio Selection 2018”

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