As I've mentioned over and over and over again, I believe the financials are the place to be. Today for example, the market is slightly down while financial stocks are higher on the day. Of note, Citigroup, a stock that I own, is up 4% today to $31.18/share. The stock has moved up sharply from $26/share to the current price over the past couple of weeks. If someone were a short term investor, now would be a good time to take some profits. I on the other hand, am holding on to my financial stocks as I think this is only the beginning. Remember however, that Citi has a book value of over $4.5/share (by conservative estimates) and is therefore extremely undervalued. Other stocks I own, Etrade, Suntrust and Synovus are all up over 1% as well.
I have no idea on the short term price movement of the markets, my guess is that we will continue to grind higher and then we'll eventually see some profit taking. After that occurs, I believe pension and retirement plan investors will continue to reallocate their portfolios out of bonds and into U.S. stocks which will serve to propel the markets slowly higher for the first part of 2012.
