Aggressive · Stocks to Consider and Updates

Portfolio Allocation – Aggressive

Building Risk  Following are my thoughts on an allocation model for the aggressive portfolio. I am reducing my exposure to Hess Corp., but only by 1% point. While share prices for energy related issues are probably moving nowhere in the short-term, oil and other energy related commodities are not going away and will eventually recover. Hess will ultimately move higher with any upturn in crude down the road. CSX, another commodity-related choice, will bear the brunt of less oil and coal to transport. The next twelve months will be challenging for the rails, CSX Corp. in particular, and the share of the pie drops to 8% from 10%. I am initiating a 9% slice for new-comer LyondellBasell, as I believe the shares are oversold and the long-term capital gains potential has become more attractive, with demand for the company’s basic chemicals likely to improve. And the well-funded dividend yielding 3.7% is a nice plus. I moved Applied Material up a notch to 9%. Given the solid underlying fundamentals for AMAT, the 2.9% yield and the outlook for an above average earnings spurt next year, this equity is worthy of a slightly larger slice than was afforded earlier this year. Foot Locker also gets a small boost to 10%, as the shares have moved higher during the recent market downturn. The athletic apparel retailer has maintained double-digit sales gains for its core basketball products and its store-expansion initiative and product mix shift toward boots and high-margin fashion items have also helped boost revenues. And despite all the recent news of a biotechnology bubble, I believe Gilead Sciences is on track for another strong earnings year and has room to run. Thus GILD, although not without risk, moves up a grade to 10%. For now, all the remaining choices stay the same. Here is the latest allocation for the aggressive list:

aggr alloc

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