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bjbj Hello everyone and welcome to another episode of EricksonTV. Curtis here with Lauren.
It s getting close to the New Year this holiday season and I thought we would do a 2-part
series to take us into the year 2013, assuming that the world is not ending as the Mayan
calendar says. So I always like to check out what people are reading in newspapers and
other media outlets. You don t get too depressed? No, I take everything with a grain of salt!
This particular article was interesting. It was from USA Today and it is titled 13 Investment
Themes for 2013. For part I of this series, we are going to go over half of these themes
and discuss if we think it s a good idea or a bad idea and why. Then in part II we will
do the other half to take us into 2013. 1. Fill up on domestic energy shares. So they
are saying that you should be moving a portion of your portfolio specifically into energy
shares because they think that s going to be a good investment return. Lauren: This
is their first piece of advice? Oh boy. Well I don t think they are trying to predict which
sector of the stock market is going to do well because that never really works well
for anybody, every, at any given time. Even if they know, for some reason, that energy
companies are bound to do well next year, the problem is that if they know it, everybody
else knows it too. So no matter what, the stock has already gone up. Curtis: The reason
I don t like it is because the takeaway is that you re trying to market time a certain
sector and it takes away from the overall diversification of your portfolio. 2. Treat
garbage as treasure trove. Basically they are saying that the garbage and sanitation
business is a growth business so you should allocate more to this sector because they
smell an opportunity. Lauren: Who knows? Maybe! That one doesn t make sense though. Again
they are basically saying to try to pick a specific sector. 3. Circle Back to China.
Even though China did not fare well in 2012 as an investment return, it is regaining strength
and could see growth again next year, so they say we should put more money back into China.
Lauren: The only way I could agree with that is if it is just that a lot of people only
own US stocks and they want to own some international. We just mean that generally it is a good idea
to diversify internationally, which a lot of people have been afraid of lately. Specifically
mentioning China does not make any sense. Curtis: Because of the way we manage our portfolios
for clients we partially agree with this. The one difference is that we ve always been
invested in China (a very small portion of our portfolio) and even though that part of
the portfolio may have slightly underperformed compared to some of the other asset categories,
we ve stayed invested and are now rebalancing back into that portfolio. 4. Don t give up
on dividend-payers. So despite the fact that the tax policy could change on dividends,
they are saying don t give up on dividend stock. Lauren: I agree with that. The tax
policy is not a reason to move out of the sector. 5. Cozy up to companies with free
cash flow. They say, basically, to rotate your investments to companies that have lot
of cash flow. Lauren: That doesn t make sense. Even if we re going to pick stocks, which
we are not going to pick stocks, it s just a completely random measure that could signify
anything. Curtis: That s like saying I m going to marry a woman based on a piece of clothing
she wore. I don t know if that sounded right 6. Seek stock with the bulk of earnings from
abroad. So the bulk of their profits are coming from abroad. Lauren: That doesn t make any
sense either. You re much better off just internationally diversifying. So far they
have not done well with this here. I d say they got 1 out of 6. Alright we ll end this
episode of EricksonTV and we ll see you next time. Happy Holidays everybody! h,Sq urn:schemas-microsoft-com:office:smarttags
country-region urn:schemas-microsoft-com:office:smarttags place Hello everyone and welcome to another
episode of EricksonTV Curtis Erickson Normal Curtis Erickson Microsoft Word 10.0 Erickson
Wealth & Tax Management Hello everyone and welcome to another episode of EricksonTV Title
Microsoft Word Document MSWordDoc Word.Document.8