Tldr; I just want to know your top ETF's stocks you have bought for the rising rate environment and why? (Below is my just my current reasoning as well as some of my favorite)
I've recently rebalanced my 401k to be pretty diversified into ETF's and am looking to increase my exposure in my retail account to single stocks, I've bought plenty of tech stocks over the last few years and sold them off during the fall of 2021. I'm very bullish on tech but I don't want to make the mistake of exposing myself heavily in the event the economy falters in 2023/24 due to interest rates causing a housing crash/recession. Everyone and their mom's have a different feeling on where the economy is heading, but for my own sake I try to stick with the most reliable info, and that as of right now is that rates will go up, probably beyond 3%, and the most recent job numbers seem to give the Fed reason to do so, but that is always changing. I also know that the issues with China's economy, Covid/MP, Supply chains, Capex and Europe all are things to consider but those are things I feel have less certainty to them.
So my question is what stocks (individual or sector based ETF's do you believe will perform within the next 2-3 years as rates rise to 3%+?
I've done some research about this recently and I feel Silvergate Capital is a really strong play on rates increasing as well as a pretty affordable P/E, also I am bullish on crypto so this makes sense to my values as well as generally doing well within the space with positive cash flow
My second pick would be Wells Fargo or XLF if you want broad based diversification, obviously Financials do very well with rate hikes, and with the most recent job number it seems that the economy (for now) is strong enough to support a rate hike. I think Wells Fargo is in the best position to benefit from hikes than other banks, most notably BAC.
My third pick would be a suite of DSF, Mastercard and Visa because obviously they do better when prices are higher (inflation), they also benefit from higher rates with outstanding balances and have performed very well in the recent years, the P/E's are a little high but I feel these stocks long term are pretty standard to have in any portfolio.
My last few notable mentions are ones I also plan on picking up but are most hedges than anything, but I still feel will do will in the current environment. To hedge any upcoming wars or further aggression as well as a rebound in the aerospace/flight markets I would buy Lockheed Martin, Raytheon and Boeing.
To hedge against recession risk I plan on buying SLV (Tracks price of silver) and GDX (Gold Miners ETF), along with UNH stock, which provides a healthy dividend and has very strong financials.
My asset mix would probably be as such 55% Financials, 15% Defense/Aero, 20% Precious Metals, 10% Healthcare (UNH)
10% In Wells Fargo, 10% XLF 20% Financials
5% DSF 12.5% Visa 12.5% Mastercard 30% Financials - Consumer Credit
5% Silvergate Capital, this carries the highest risk in my opinion, but I'm bullish on crypto and this stock is set to gain 16m/year income for every quarter point rate increase and it cash flow postive.
5% BA, 5% Raytheon, 5% Lockheed Martin 15% Defense/Aerospace
10% SLV, 10% GDX - 20% - Precious Metals/Commodities
10% UNH stock - Healthcare
After doing a lot of research over the last couple weeks and months I've found myself feeling pretty optimistic and pessimistic about the market, I thought about whether my favorite sector of the market, technology would be going up or down, but time and time again I find myself questioning the global political risks, inflation, and interest rates weighing on the housing market and growth stocks. I couldn't find a way to position my money into individual stocks. I recently bought AMD at 77 and sold for 97~ a share, after being idiotic about my Roth IRA. I do want to take advantage of the one thing I know for sure will be happening, and I don't want to overshadow my decisions because of greed or fear, I want to make decisions based off a trajectory that's most certain. This portfolio is built under the assumption that rates will rise and that in the event of a recession I will have hedged against my losses, as well as adding defensive stock like LHM, RTX and Boeing, which I think will have always been great names, but now was the time to add to them for exposure.
I was unable to update everyone on my IRA as the post would not let me, so a small update and where I'm invested now.
20% BRKB - 10% QQQ - 10% VTI - 10% VIG - 10% HYG - 20% GDX - 20% ICLN
I do enjoy holding individual stocks, but a ROTH IRA is not the place to do so, I will do what I said above with my retail portfolio, after maxing out to 20,500/year, and diversifying my assets across many different sectors and ETF's I feel confident I can balance my retail account between individual stocks while still having a good amount of risk tolerance and sector balance. I know that individual stocks are risky and many may not agree with my decisions but I enjoy doing this, and if I am one of the 90% who makes under market returns than I will live with my decisions in life happy enough knowing I'm financially secure and doing alright. I will hopefully post an update in a year or so while I sit tight in a position I feel comfortable while selling covered calls every month to help hedge my risk tolerance further. My %'s may change as I figure out which stocks have the best returns with covered calls and what not but this is my current estimation.
I don't expect people to read this far but if you do, what are your top stocks/ETF (sector specific) for the next 2 years and why?
Submitted August 06, 2022 at 02:11AM by omenoflord https://ift.tt/ML3QBHV
