La Financière de l'Echiquier
I am still very bullish on US stocks, and have stayed fully invested. The US economy is going from strength to strength and, in my opinion, any market dips, like the one we saw in early October, should be bought by investors. At 60%, my exposure to the US remains overweight.
We adjusted our allocation a couple of times recently. During the summer, our valuation models showed our long-time favourite technology sector names were becoming stretched, while more economically-sensitive stocks, such as oil company EOG Resources and heavy machinery manufacturers Caterpillar and Deere, were very attractive given our forecasts. So the fund’s exposure to technology was reduced by 10% as we boosted our positions in cyclical names.
However, the October stock market plunge, combined with outperformance by those cyclical names, reversed our valuation models once again and we are now buying back technology stocks. Many of these have been our best performers this year, such as Amazon, Adobe, Salesforce and Mastercard, all of which are up at least 25% this year. These companies are leading the way in terms of big data and cloud computing, which should provide success for years to come.