Equities to Rise Further, but Know When to Get Out

When it comes to your portfolio, it's all about timing, said Sani Hamid director of wealth management economy and market strategy at Financial Alliance. With equities slowly approaching the overweight mark, you have to look for the signs on when to get out, he added.

"At this particular time we do see equity markets rising further--10 percent, 15 percent, 20 percent," Hamid said.

But with the Dow heading above 12,000 and the S&P going to 1,300, Hamid saw this as a signal to be cautious.

"If we get indications that people on the sidelines, the retail places, have started to move in, that's the signal to us to become very cautious."

Hamid said his firm uses a technique called 'notching' to keep his investors in the right place. As the markets go higher, or when the risks get too high, one should notch down a grade, he said. For example, a moderate investor would become a conservative investor, and so on, Hamid explained.

Lately, investors have been looking to emerging markets, and with good reason, he noted. But that may soon be changing as heavily-traded emerging markets are getting too heavy.

Hamid suggested considering investments that investors had been avoiding before.

"...if money moves up from the sidelines, potentially it could go into markets which have been avoided so far -- the U.S., potentially even Europe... So I think there could be a dichotomy here whereby if funds flowing in from the sidelines could actually move into these markets rather than Asia, because we are already full invested in Asia."

He is recommending his clients focus on three areas: dividend-paying unit trusts, convertible bonds, and defensive sectors, like healthcare.

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