The markets are off to a nice start for the week, currently up a little more than 1%. Stocks have been strong of late, posting a return of just over 8% in the past 6 trading days. While this has been wonderful for individuals who own U.S. stocks (which I've said is my favorite geographic area to be invested in), I think we're going to see a seesaw of a week as some big money managers move money to the side as they look to protect some of their short term profits.
I'm taking the positive action so far today to lighten up a little bit as I'm selling my KKR Financial (KFN) investment for a 12% gain. I own very little of the stock but I still want to take some small profits and wait for a move lower in stocks prices over the next few days so I can move back in a buy some stock at lower levels. My largest sector holdings still like in the financial sector, and I'm sticking with my forecast of as the U.S. economy continues to expand, albeit at a modest pace, banks are going to represent one of the best sectors to own. There still isn't any news out of Yahoo regarding what decision the board of directors is going to make with regard to the company being bought out. I'm still looking for an acquisition price of somewhere around the $20-$22 price area (fingers crossed). The stock is currently flat on the day sitting at $16.02/share.
Generally speaking, I still expect the U.S. economy to muddle along and expand at a very slow pace (but grow nonetheless). As of right now, I've have roughly 70% of my clients money invested in stocks, with the other 30% sitting in cash...I'll be looking to lower my overall exposure to the 60% level, and from there I will wait to move that money back into stocks if they become more attractively priced. As for now, I'm still watching Europe with abated breath to see if the European Union countries such as Germany (which is the largest) and France can continue to work together to stabilize the financial system. In other news released this morning, economic data out of China still show the economy to be fragile as the government is still dealing with an inflated housing market and slower than expected manufacturing growth (I know all this sounds boring but it's important nonetheless!).
