It’s a new year and it’s time for our new picks of ETF funds and stocks for 2008. Our last year portfolio yielded returns 0.81% above S&P 500 market average (based on C Fund performance during the same period of time – i.e. from 20-Feb-2007 till 18-Jan-2008). We will continue to do a good work and pick stocks and ETF funds that will help you to supplement your TSP investments.
Disclaimer: all Stocks and ETFs were screened by our staff but we do not guarantee any returns. The only thing that we do guarantee is our unbiased opinion. We put our money where our mouth is and invest into the same stocks/ETFs.
XLK (Jan 18th price $23.25)
Technology Select Sector SPDR
Our take: Technology sector stocks are trading at a very attractive P/E ratio levels. Yes – we know 40% premium over S&P 500’s average P/E is high but tech stocks historically were traded at 70%-75% premium. At the same time technology is a driving force behind the world’s economical development. It changes the way we communicate, live and consume energy.
VHT (Jan 18th price $59.50)
Vanguard Healthcare Index
Our take: Health Care is the second most undervalued sector after Tech. We also noticed that almost every strong Presidential candidate has a plan on how we can improve health care system in the United States. One way or another it smells like profits for us.
ODP (Jan 18th price $11.54)
Office Depot
Our take: Recently I’ve looked at my office and realized that almost 80% of supplies and equipment I purchased were from Office Depot. It might be a bias opinion but I believe that Office Depot found some secret formula on how to retain customers and slim down their operational costs. It also looks like the recent stock market turmoil unreasonably punished Office Depot – now it trades at P/E ratio of 6.38 (!!!!) which is way below the S&P 500 average.
C (Jan 18th price $24.45)
Citigroup, Inc
Our take: it does not look like Citigroup’s stock price can go any lower. They just announced $10 billion write-off, which was cause by sub-prime mortgage mess, and reduced their dividends. Market already priced-in those events and it is now time to BUY! This company is starting with a clean slate leaving all problems back in 2007.
BAC (Jan 18th price $35.97)
Bank of America
Our take: Bank of America is yet another victim of sub-prime mortgage mess. R&D spending is the main reason why we love BAC. Most of financial agencies (and accountants in general) tend to be very conservative. Yet Bank of America keeps funding its’ R&D efforts and they have a lot of things to show for the money that they’ve spent. For example - did you see automatic pay-roll accounting module that they offer for free to their clients??? That thing is amazing! If you own a small-business and have several employees that module will completely eliminate the need for you to hire an accountant. All your pay stabs, W-2s and other forms/reports will be generated automatically.
HMC (Jan 18th price $29.59)
Honda Motors Co., Inc
Our take: The whole world is going green and Honda Motors seems to be a leader when it comes to eco-friendly cars (hybrids, natural gas, hydrogen and etc.). At the same time nobody can beat Honda’s cars quality and dependability. The only thing that I still do not understand is why nobody designed diesel-electric car yet? That car can be easily manufactured based on gas-electric model and at the same time would have much better gas mileage…
VGK (Jan 18th price $67.49)
Vanguard Euro Stock
Our take: Economies in China and India seem to start running out of steam. Yet Europe and Japan still look very attractive.
EWJ (Jan 18th price $12.50)
iShares: Japan
Our take: same as above.