On the hunt for health care, financial and energy positions

Three of the best performing sectors year-to-date are health care, consumer discretionary and financials. As part of my Covestor Macroeconomic and Secular Trends portfolio rebalancing activity, I am considering starting a position to best cover some of these sectors and become more diversified.

My goal is to use a handful of stocks to represent the broader market and secular trends. Here is my current coverage:

  • Chipotle (CMG)

    • Consumer discretionary – restaurant

    • Healthy, responsible food trend

  • Terra Nitrogen (TNH)

    • Basic materials – fertilizer

    • Inverse play on natural gas

  • Verizon (VZ)

    • Telecommunication services

    • Mobile devices and internet trend

I plan to include the following industries and trends soon to help diversify:

  • Health care

    • Aging population

    • Government policies

  • Financials

    • Potential opportunities from Federal Taper

  • Energy

    • Shale boom and energy independence

Maintaining a diversified portfolio is important to mitigating negative risks and unexpected turns. Adding 2-3 new positions will potentially double my diversification and still keep the number of positions in the portfolio small and manageable.

The investments discussed are held in client accounts as of July 31, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.

Author profile

Jonathan Wee
Jonathan Wee
I’m a growth investor with a long-term view on macroeconomic trends. As a systems engineer, I use processes and tools that reduce the risk in complex projects to create better products for customers. I bring this same approach to my investments. Poor or risky decisions make investing a nightmare. That is why I want to increase the transparency so lacking in typical mutual funds with regard to research, watch lists, trade decisions and portfolio performance. By publishing these findings, we can improve our investment strategies together.