Rebalancing time? Some thoughts on where to invest now.


Every day, I watch the evolution of the stock market and my portfolio in my Google Finance spreadsheet. I know it's not healthy behavior, but I can not resist. For a few minutes, the amount of green or red changes my mood. Ugh!

However, I sometimes notice trends in stocks and index funds that I am. This is extremely useful several times a year.

One of the last times I noticed a trend was a week or two ago. I noticed that my stock of SodaStream had exploded. I've taken a look at the news and it turned out that Pepsi buys the business at a great price. Yay!

I am not interested in owning Pepsi shares. Fortunately, my SodaStream investment being in a retirement account, I could sell it with no tax ramifications. That's what I did.

If it had been a month or two ago, I would not know what to do with that money. I would have left it in cash and I would wait for the next purchase opportunity. This was not done a few months ago and I already had some ideas for buying opportunity in mind.

Before getting into these ideas, I want to address the obvious. Chances are, you have not invested in SodaStream. However, you may still have money to invest.

It may be more likely that you are investing in some US stock indexes such as the S & P 500 or the Wilshire 5000. I have noticed that stocks continue to reach new heights day by day. It's great … Go United States! However, I have always been afraid that my money depends too much on the United States. We already have a very important real estate investment here. To make matters worse, the United States is at the heart of our main sources of revenue.

The United States is the main point of failure of our diversification. I like the idea of ​​having money spread around the world. The best way to do this is to buy more foreign securities. If you are of the same opinion, you may find that you have to rebalance your positions, as foreign equities are probably much less important than US equities.

With this as a stepping stone, let's start with:

Some investment ideas for the moment

Remember the investment motto: "Buy low, sell high?" If US indices (or in my case, some events like SodaStream) are high, I look for products that I can buy low. I prefer index funds because they are less likely to be the subject of a kind of scandal similar to Enron that few people have seen coming. (Still, I'm still investing in individual companies, like SodaStream, I never promised that I made sense.) Three ideas suit me. (I generally prefer ETF and Vanguard funds when possible because of low expense ratios Complete information: I own these three index funds.)

  1. Emerging markets (symbol: VWO) – You may have noticed that emerging markets have caught fire recently … unfortunately, this is a garbage fire. There is the impression that they are down 5 to 6% last week. It is trading at its 52 week low and 20% of its 52 week high. There are many things in the world that explain that, in which I will not talk about here. Things can get worse before you improve. However, in the long run, I think these countries have a greater opportunity to grow as the world becomes more connected. I've poured all the money from the SodaStream sale into this index.
  2. Frontier Markets (ticker: FM) – You almost never see anything writing on the border funds, except for my article on them of course. Frontier funds are very small, so small that they do not even qualify for emergence. Here are some examples of countries: Kuwait, Vietnam, Romania, Nigeria and Qatar. The Bank of Transilvania seems to be one of the top 10 holdings. As we all know, if you are in default of paying a loan from the Bank of Transilvania, the latter sends Dracula in your pursuit.

    Some people will probably call the game in frontier markets, but again, it is quite diverse. I would not want to make a big part of it, but it's worth considering. Like emerging markets, FM is trading near its 52-week low, but nearly 25% of its 52-week high.

  3. Solar energy (Ticker: TAN) – Who likes carcinogenic tanning beds? Not me. Fortunately, this TAN involves investing in solar energy companies. I do not know if too many people doubt that solar energy is the future. I'm starting to see him everywhere … even on the roof of my own house. It is trading close to its 52-week lows and more than 20% from its 52-week high.

Finally, I hesitated to share one last investment idea. I have not really studied the company in detail, so you have to do your own research. It seems that SnapChat (SNAP) is below $ 10 for the first time in its existence. I know they have had horrible incomes in the past, so maybe it's well deserved. However, I know that all kids love the business and a $ 12.5 billion valuation may be low. I'm really on the fence about this one though, so be careful. I could see Snapchat disappearing before something like solar energy or Transilvania. Full Disclosure: I've got some free shares from Robinhood's free stock promotion.

At the end of the day, it's up to you to manage your money as you see fit. I hope that over the next 20 to 30 years, I plan to keep this money invested, growth will be above average only if I stay in the United States. Otherwise, I sleep a little better knowing that my investments are diversified (and supported by Dracula).