Goodale: I have indeed gone from "all cash" to being fully invested for the next two weeks. I made the switch after the fifth .50% Fed rate cut. With NASDAQ at 2200 I was very careful about my tech exposure and have only a market weight in it. I have avoided buying individual stocks and went into a basket of mutual funds, with broad exposure and diversification. I DID, however, overweight the mid-cap and small-cap sectors as opposed to the large caps.
My tech exposure was gained by buying a 7% stake in the UOPIX shares. I think the NASDAQ is more likely to fill the gap toward 2500 than drop below 2000. I think any NASDAQ correction with current investor psyche being bullish will be 5-10% and then be met by institutions and individual investors "buying the dip". The tech-oriented mutual funds I selected were: WOGSX, BRAGX, NEEGX, and TMGFX. None of these have nearly the tech weighting of a true tech fund, however.
If NASDAQ does retest its lows sometime this year, I will load up on the UOPIX shares rather than buying individual tech stocks. I think buying the tech 100 Index is far safer than buying individual tech stocks in this climate. I know that the NASDAQ will be higher 3 years from now -- I cannot say that about any individual tech stock with the same degree of certainty. I like Ultra ProFunds OTC shares (UOPIX) because it uses margin to give you 200% of the NASDAQ's movement without the fear of time decay or margin calls. However, these shares must be bought at a level low enough to be "compelling" and you must be prepared to hold these shares for several years in the event the NASDAQ goes South shortly after you buy them -- remember, your losses will be doubled. |
