AlphaProfit to Provide New Mutual Fund and ETF Recommendations on 06-30-10
The AlphaProfit sector-based Core and Focus model portfolios will be reconstituted for the emerging economic milieu on June 30 to include newly recommended Fidelity funds and ETFs.
As the year's mid-point approaches, the markets have recouped recent losses and returned to pretty much where they started. Loss of confidence in European sovereign debt and erosion in the euro (FXE) were among the major events of the first half. Investors fretted over the fiscal condition of Portugal, Italy, Ireland, Greece, and Spain. The acronym PIIGS has entered Wall Street's lexicon as credit rating agencies downgraded sovereign debt ratings of several European nations.
While the SPDR S&P 500 ETF (SPY) that tracks the popular S&P 500 index ($SPX) is up 0.7% for the year, there have been notable leaders and laggards from a sector perspective. Share prices in the consumer discretionary and industrials sector have led the way. The Consumer Discretionary Select Sector SPDR ETF (XLY) and Industrial Select Sector SPDR ETF (XLI) are up 9.3%, and 8.3%, respectively.
Commodity-related materials and energy sectors have lagged. Materials Select Sector SPDR ETF (XLB) and Energy Select Sector SPDR ETF (XLE) are down 6.0% and 2.1%, respectively.
Commenting on sector performance Dr. Sam Subramanian, Managing Principal of AlphaProfit Investments, LLC and Editor of the AlphaProfit Sector Investors' Newsletter said, "Upward revisions in earnings guidance provided by media companies like Viacom (VIA, VIA-B) and casinos like Las Vegas Sands (LVS) have helped performance of consumer discretionary shares. Shares of restaurants like Chipotle Mexican Grill (CMG) and Ruby Tuesday (RT) have also been among the stronger performers benefiting from keen interest of private-equity firms in taking over chains like CKE Restaurants (CKR), Denny's (DENN) and Captain D's."
"Meanwhile, a rising U. S. dollar coupled with concerns of slackening worldwide commodity demand weighed on shares of companies like Alcoa (AA), ExxonMobil (XOM), and U. S. Steel (X)", Dr. Subramanian pointed out.
Going into the second half, investors are concerned over the strained fiscal situation in Europe and the possibility of a contagion. Meanwhile, rising inflation is prompting central banks of many nations including China to tighten monetary policy and apply the brakes on growth.
Considering how deep the subprime collapse-led recession was and how rapid recoveries from previous recessions have been, the present U. S. economic recovery appears sub-par. For one, the growth rate appears to have peaked in the fourth quarter of 2009 itself. Job creation has been nauseatingly anemic. With little support from the global economy, the possibility of a double-dip recession has entered the realm of possibilities.
The AlphaProfit sector-based Core and Focus model portfolios will be repositioned on June 30 to include recommended Fidelity funds and exchange-traded funds. Discussing upcoming investment recommendation changes, Dr. Subramanian remarked, "Overweighting winning sectors like consumer discretionary and industrials through investments like Fidelity Select Automotive (FSAVX), Fidelity Select Transportation (FSRFX), SPDR S&P Retail (XRT), and iShares DJ Transportation Average (IYT) helped our readers tracking the Core and Focus model portfolios to market-beating gains of 8% and 11%, respectively in the first-half."
Concluding his remarks Dr. Subramanian said, "Now, our first priority is to help readers protect these gains. We will seek to help readers build on these gains by selecting sector and industries using the time-tested, successful ValuM investment process. We believe our selections can do well even if the market environment is not particularly favorable."
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AlphaProfit Investments, LLC is an independent investment research firm based in Sugar Land, TX. AlphaProfit publishes the AlphaProfit Sector
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