I’ve done a decent job in 2018 of staying away from the plunging financial sector–except in my Dividend Portfolio.
There, sucked (or “suckered” if you prefer) by high dividend yields and the prospects of rising net interest margins as the Federal Reserve raised interest rates–and looking for something (anything) to diversify the portfolio beyond the energy sector–I wound up overweighted to the sector at exactly the wrong time. My January 23, 2018 pick for Bank of America (BAC), for instance, is down 23.12% since it added the stock to the portfolio as of December 17. Citigroup (C) is down 17.41%.
It would be worth hanging onto these stocks if 1) the Fed was sounding likely to raise are rates more than once in 2019, but the central bank may not even go that far, or 2) the economy was looking frisky in 2019, but the economy is looking increasingly risky.
With all that in mind, and with Citigroup’s recent warning that full year 2018 revenue and earnings won’t hit formerly expected targets, I’d taking my punishment today and selling Citigroup out of this portfolio today December 17.
That does leave me with a slot to fill in this portfolio. Which is the subject of my next post today.
