Fisher Investments on Consumer Staples

9

CONSUMERIZE YOUR PORTFOLIO—INVESTING STRATEGIES

In this final chapter, we’ll discuss various Consumer Staples investment strategies you can use building on the knowledge in this book. The strategies include:

• Playing the market cycle

• Playing style shifts

• Developing new categorizations

While the strategies presented here are by no means comprehensive, they provide a good starting point for constructing a portfolio that can increase your likelihood of outperforming a Consumer Staples benchmark. They should also help spur some investment strategy ideas of your own. After all, building your own unique framework of investment strategies is the primary way you can discover information few others have discovered yet. And that’s what astute investing is all about.

STRATEGY 1: PLAYING THE MARKET CYCLE

Top-down strategists pay particular attention to where they think they are in the market cycle, remaining active in their asset allocation decisions. Market cycles vary in duration and magnitude, so the most important question to ask at any point is: What’s the appropriate positioning on a forward-looking basis in terms of asset class, relative to your chosen benchmark? By and large, for most long-term investors, this is a question of whether you should be fully equitized relative to the benchmark, partially equitized, or mostly defensive by holding cash and/or bonds or taking other measures to reduce market-like volatility.

After determining the percentage of equity exposure, the ...