Topic: How To Invest

What is Pat’s commentary for the week of March 10, 2015

Article Excerpt

Here’s the text of the quarterly letter I recently sent to our Portfolio Management clients: “A client of mine, Dr. J., recently said, “Pat, you advise investors to spread their money out across most if not all of the five main economic sectors. Why not just leave out the resource sector?” I think that’s a bad idea. It disregards the one key contribution that resource stocks make to a sound portfolio, as you’ll see below. But I’m sure many investors agree with Dr. J. After all, the weak performance of the resource sector goes back much further than the recent plunge in the price of oil (from $110 U.S. a barrel last July to a recent low near $45 U.S.). Diversification paid off Dr. J. calculates that his resource stocks have produced negative returns in five of the past seven years (although the sector gained 158% in 2009). He also…