Tuesday, October 2, 2007

sector investing? the way to do asset allocation?

So, if one sector is doing bad, then why not buy a ton of it because it is bound to go up, then when it has peaked, sell!

here are some bad links:
http://www.alphaprofit.com/sector-investing.html (junk)

Well that has a term its called "sector investing" or "sector rotation" It's an interesting idea, but I wonder how hard it is.

The conventional wisdom is to set your asset allocation based on your risk tolerance and age until retirement. However, I don't think the professionals stick to that, and I wonder if you can do better. Sector investing might be one way, but what is the real way?

Anyway, case in point: I was listening to http://www.money-guy.com/asset-allocation-basics and Brian P said the shpeal about not trying to time the market. Well, then if you listen closely, you will see that he says "I'm keeping my real estate allocation low because it's getting killed right now" or "I'm taking some profits from commodities because oil just had a huge run from $50 per barrel to $80." He's tweaking the asset allocation! How does he do that?

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