market folly

Market strategist Jeff Saut's weekly investment strategy highlighted what dividend stocks he likes last week. This week, he provides some answers to some interesting portfolio positioning questions:


Q: Cyclical or defensive stocks?
A: "I would buy cyclicals because barring some major event I don't embrace the view that we are going to see another recession in the U.S. for the near/intermediate future."


Q: 2011 was a risk on/risk off year, so is it a top down or bottom up strategy for 2012?
A: "Last year you only had to get two things right. You had to raise cash in March/April and put it back to work during the bottoming sequence of August – October. I did that and think a similar strategy will work this year as well. That said, one always needs to employ a 'bottom up' strategy combined with a 'top down' view."


Q: Should we buy gold or gold stocks?
A: "Both; but if I am forced to pick just one, I would buy gold stocks because they are well behind gold’s performance. Therefore, after the yellow metal’s consolidation is finished, gold stocks are likely to play catch up."

We've posted up articles on this very subject in the past: gold versus gold miners. Last week we also highlighted how John Paulson has been buying NovaGold.


You can read the rest of Saut's answers to questions about Treasury yields, GDP, and QE3 in his full investment strategy embedded below:



You can download a free .pdf copy here.


To read other recent commentary, head to Jeremy Grantham's 10 investment lessons as well as PIMCO's Bill Gross on his defensive outlook.