Portfolio > Economy & Markets

Last Week’s Market Slide a Dress Rehearsal: Searching for Alpha for March 2011

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As I mentioned in last week’s blog on AdvisorOne, the Libyan-inspired pullback in stock prices in the last full week of February is an event that needs to be strategically considered. After such an impressive stock rally in the month and year to date, a dip in prices is to be expected. Successful advisors will form a plan to take advantage and redirect portfolios.

Due to fundamentals, I still consider any pullback to be an opportunity to pick up some higher beta positions which may drop precipitously in value. One potential area of opportunity may be emerging markets, as their underperformance versus tech stocks may augur for a switch from the latter to the former.

So far, last week’s selloff has been retraced by about one-half. Due to the speed in the drop and in the recovery, I don’t consider it to be a tradeable drop. Nonetheless, one is very likely to occur in the next few months. It’s time to come up with a buy list and monitor valuations.

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