This strategy is necessary if you have a larger amount of money to take care of or you begin to cry when you lose 10 percent on your book value. The second disadvantage is that you lose performance in a strong up moving market.
Since 2009, there were nearly no bigger corrections at the market but with low beta and safe haven stocks, your performance would be only half of the return from the markets. What you need to get a push for your portfolio is a high beta stock. I don’t recommend buying them because it’s a definitely riskier strategy and nobody knows when the market turns into a bearish mood.
However, let’s take a look at the high fly momentum stocks from the healthcare sector. Those are stocks with the highest beta ratio from the sector. They have a beta between 1 and 2. With focus on the dividend paying stocks, only 17 stocks from the healthcare sector pay a dividend and being correlated with the market by a factor of up to 2.
One High-Yield is below the results and 16 have a current buy or better rating by brokerage firms.
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