ETF Portfolio

Today I updated my portfolio allocations. Over the past few months I have sold a great chunk of my TIPs as well as some equities and some riskier bonds. My cash allocation is now at a whopping 56% of my total portfolio. It costs money to stay in cash because of the low interest rates in my brokerage account, but there is utility in having the liquidity. Usually, bonds will rise when equities fall but I did not load up on bonds due to the prospect that interest rates will rise this year. If anything, I am more inclined to believe that this is just a correction in a bull phase and that I should be scaling back into equities at lower prices. However I will not be rushing in and will be happy to sit tight and protect the impressive returns made last year.

Last week, the Dow gave up all the gains made in the past 3 months, and the FXI plunged to what it was last August and EEM is now back to where it was last October. This will certainly worry the technical analysts, but how ominous is this really? Will the fundamental traders step in to get things on the cheap? This is one of the questions I will be asking over the next few weeks.

On the bond side, interest has been creeping back in both TIPs and IEF, and on the commodity side, Gold has also given up its gains from last October due to the strengthening dollar.

The Hong Kong’s Securities and Futures Commission has published an unbiased review and preview of global markets which I heartily recommend. Unlike ‘reports’ published by bank, funds and brokers – reports published by exchanges are less likely display bias.