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My equity portfolio has 23% Financial, and 19% Energy. Is that too high? What can I do to reduce exposure?
 

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Are you comfortable with your company's. Are you comfortable with the downside risk. If you are then it's perfect "for now".

Have you researched and found better place for your money. Are the future prospects looking good for this new area. Then it's time to look at your current portfolio.

We all try for diversification sometimes we get close.
 

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Agreed. Depends on what your comfortable with. Depends on what your other investments are. Depends on what your investing goals are. Depends on what your financial and energy holdings are....
 

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Just to share, not to recommend. For my stock portfolio I'm;

Consumer 1% (Colgate)
Bank 25%
Insurance 13%
Communications 14%
Industrial 1% (GE, what else do I call it?)
Resource 19%
Utilities 13%
Fixed Income 5%
Cash 9%

(and 81% in Canada!)

My Financial is MUCH higher but resources is similar. Resources are Global Resources MF, Energy/Resource e-series with some SU & CNQ stocks as well. Am I comfortable with it? Yes but it's at MY limit. My objectives are for dividends in the near term and tough to safely beat the banks. Hoping for capital gains with resources - this works for me. Yourself? As Cal said, depends on your objectives, risk tolerance....perhaps as a default position or guidance, just align with the TSX or S&P500 (holy ETF Batman)...it works until it doesn't.
 

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My equity portfolio has 23% Financial, and 19% Energy. Is that too high? What can I do to reduce exposure?
Hard to say. you need to give more info. But as an FYI, XIU (which is based on TSE60) is heavly into Financials and Energy. Probably more than 42% combined. so in a way you are underweight Canada top 60 companies.
 

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I guess I just fear the financials industry with the over-leverage that everyone has on everything. Governments (especially US) are actively trying to hold up the house of cards.

I think I'll be comfortable if my allocation of any sector goes below 20%. Is there any sector that hedges well against Financials sector?
 

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My equity portfolio has 23% Financial, and 19% Energy. Is that too high? What can I do to reduce exposure?
As other have said; it's all what you are comfortable with. For comparison, I have ~39% in financials and ~31% in consumer staples/discretionary in my equity slice of my portfolio -- I sleep well at night. :cool:
 

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a portfolio that's 23% financials & 19% energy looks good to me, assuming that the individual securities are well-chosen.

these 2 sectors are the bellwethers, the drivers, the lodestones & the jewels in the crown of the canadian economy. Having 42% of one's portf in selected values in these sectors makes a lot of sense for canadians who can sit out the energy risk. (rhetorical Q: what isn't risky.)

the sectors are easy to research because they're in front of our face 24/7. This particular pair, finance & energy, tend to offset each other over long time frames, ie in the past they have not traded in tandem, although i notice more of a lockstep during past 18 months. Thumbnail: strong solid sectors playing to the home crowd, plus a rough natural hedge thrown in for free.

ps i tend to hold 25-35% mostly canadian finance & 20-25% canadian energy.
 

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Along the same line, I'm 24 % Financials (mostly CDN, some US, some UK), CDN's for dividends, others for growth) - Canadian banks will surely up their dividends after the BASEL lll, banking reserve requirements come out - they all seem to hold what it will take. Once the dividend hikes come out, the stock price should increase (double whammy), some US banks will do well (not as many), and even fewer European banks will meet the parameters.
As for Energy (oil), there is no doubt that it will take up to ten years for the world to convert to alternative energy, so I am hanging in for the long haul.
Good luck with your selections, a lot of the Canadian oil and gas companies, especially the trusts pay good dividends (we should do as well after they convert to dividends as trust payments are 100% taxed, but we get a break on the dividends from Canadian corporations).
 
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