Reducing Risk

Reducing Risk

Flash Note

I recently made the case to add to commodities. The logic was that the Chinese recovery would be strong while the dollar was weakening. Having sold commodity stocks last year after a fabulous run, they had fallen enough, and it was an opportunity to buy.

The Chinese recovery is not all it seems. The property sector is under pressure once again, and debt defaults are rising. As I said in my last note, the dollar has started to rally, and this is putting commodity prices under pressure. The situation has changed.

Having given markets the benefit of the doubt since October, and having enjoyed a rally, I believe we should be reducing risk once again. This is very tedious, I know. But preserving capital is the priority. This is a first step. If commodities keep weakening, I shall keep selling. As always, more next week.



Reduce WisdomTree Commodities ETF (AGCP) from 5.8% to 3% of Soda


Sell iShares Silver ETF (SSLN)

You may wish to sell PHSP instead, as the fee is slightly higher, but it has significant capital gains.

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