Friday February 2nd 2018 Newsletter

Friday February 2nd 2018 Newsletter

by Timothy Guthrie on Feb 2, 2018


Hello All,
As of this afternoon, the Market peaked last Friday. Many tech holdings have declined 4% since then, so today to lock in gains for those who have held them for some time, and to minimize losses for those who have not held them very long, I sold a large portion of our tech holdings. I sold 100%  of:
QTEC- NASDAQ 100 based ETF
ROBO- Robotics ETF
BOTZ- Artificial Intelligence/ robotics ETF 
IHI- Medical device ETF
FBT-Biotech ETF 
ETIHX- Biotech mutual fund
FSMEX- Medical device mutual fund
We still hold tech/robotics through GNXIX at about 6% of our assets, and still own stocks in other categories. These holdings were sold because they are the highest  ‘beta’, meaning they move up AND down faster than the overall market. We have to give these stocks some room to naturally bounce around, but 4% is my limit. Other stock sectors are not as volatile. 
Generally speaking we have had excellent results with these holdings and I fully intend on re-buying them when I believe the downside risk has diminished. I am fully convinced long term these areas will do very well.
What is driving the market downward at this point?  Possibly several things:

  • Interest rates are rising, rising faster than many expected, spiking sharply this week. Interest rates have been expected to rise, but at a slower pace…
  • The markets have been fantastic for over a year, and some point there is going to be a pullback.
  • Political risk is rising. The battle between Trump and his foes ramping up. This could get ugly.  

I am not predicting a big sell off, or a major turning point. I just need to have a selling discipline, to lock in gains and minimize losses. The overall conditions are still very friendly to investors, and I expect the global expansion to continue.
I will continue to update you as I have more information to share.