European Woes Knock Stocks Back Down
If you’ve been reading my blogs you know all about the global currency crisis – and that Europe is in real trouble. Yes. No question. But take a look at these other WSJ headlines from today’s cycle:
Wells Fargo Profit Rises, Revenue Slips
Accounting Gain Boosts Citigroup Profit
Hedges Haunt Morgan Stanley
And how about this one as a kicker:
Credit-Card Issuers Vie for Risky Business—Subprime Borrowers
In a nutshell, bank revenues are shrinking, their accounting departments are playing games, and even though some banks can’t get out from under the last sub-prime debacle – many are chasing the same bad bet.
Are you kidding me?
Banks haven’t learned their lesson. And why would they? There’s no respect for free money – and that’s what banks have been getting for far too long.
I’ve blogged about asset allocation in the past but never about rebalancing your portfolio. The action zone midpoint is a great place to do this. It’s also a good time to check your industry rankings. The 15-51 Indicator ranks financials fourth in priority order. That’s too much for an environment like this (see above headlines.) Financials should be last in priority for your stock portfolio, or even better, completely removed from the portfolio all together.
They’re just not worth the risk.
Stay tuned…