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It's time to take some positions for 2008

My first blog update of 2008 - happy new year to all of you readers!
I was watching the ups-and-downs of market for last two weeks and finally decided to write after I got convinced that we have seen the worst in stock market. Now that Dow is close to 10% down from its peak and Nasdaq is back below 2500, how worse can it get. There are some signs emerging which confirm my theory that we are very near (if not at absolute bottom) of the market.

As promised, here is update on model portfolio I constructed at start of 2007 which has returned 15.7% compared to S&p returns of about 5.39% nearly beating it by 10%. Most of the contributors to this decent performance was mutual funds focusing on emerging countries and oil-sector. It's no wonder that my two stock individual stock picks (Cisco and Yahoo) were worst performers - other than real estate mutual fund.

Investment Quantity 1/5/2007 1/1/2008
Rate Amount Amount %Gain
UUPIX 156 32.09 $5,006 $8,558 71.0%
FSESX 80 62.69 $5,015 $8,333 66.2%
FXI 47 105.94 $4,979 $8,011 60.9%
TABRX 397 12.61 $5,006 $7,563 51.1%
VEIEX 211 23.68 $4,996 $7,120 42.5%
VGTSX 573 17.46 $10,004 $11,934 19.3%
VDMIX 803 12.46 $10,005 $11,222 12.2%
VWEHX 804 6.22 $5,000 $5,300 6.0%
VFINX 77 129.87 $10,000 $10,407 4.1%
$$CASH 1 5000.00 $5,000 $5,000 0.0%
VSTCX 492 20.31 $9,992 $9,704 -2.9%
CSCO 527 28.48 $15,010 $14,266 -5.0%
YHOO 180 27.76 $4,996 $4,187 -16.2%
VGSIX 198 25.21 $4,991 $4,110 -17.7%
Total ($): $100,000 $115,715

Now that market is near bottom, here is model portfolio for 2008 - my goal is to beat S&P by at least 2-3% by year end.

Overall distribution:

Stocks $25,000
Domestic Equity $32,500
International Equity $32,500
Bonds $10,000
Total $100,000

Portfolio:

Investment Name Quantity 1/14/2008
Rate Amount
CSCO Cisco Sytems 190 26.29 $5,000
AMZN Amazon 60 82.87 $5,000
RDN Radian 532 9.40 $5,000
PAY Verifone 288 17.34 $5,000
CSIQ Canadian Solar 231 21.67 $5,000
VEIEX Vanguard Emerging 229 32.73 $7,500
VGSIX Vanguard Real Estate 527 18.98 $10,000
VGTSX Vanguard International 646 19.36 $12,500
BKPIX Profunds Ultrasector Banks 299 25.07 $7,500
VFINX Vanguard S&P 500 57 130.44 $7,500
UUPIX Profunds Ultra Emerging 184 40.75 $7,500
TABRX Templeton BRIC 270 18.51 $5,000
FSESX Fidelity Select Energy Services 75 99.81 $7,500
VWEHX Vanguard High Yield Corporate 1718 5.82 $10,000
Total ($): $100,000

As you can see, there is higher allocation to financials since I believe that financials are at same stage as what tech was in 2002 and after some consolidation will have a good 2nd half of 2008

Disclaimer: I may have position in some of the stocks and mutual funds mentioned in the writing

Good luck and good night !

/Shyam

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