After numerous overnight sell-offs followed by intra-day rallies, the S&P 500 finished the week down a little over 1% and nearly 5% off the recent highs hit on April 2nd. This week I added a couple positions to my portfolio for the first time in several months. The two new additions are Ensco PLC (ESV) and Sohu.com Inc. (SOHU), which offer global exposure to a couple sectors I remain long-term bullish on (oil drilling, Chinese Internet). Both stocks have declined substantially enough in recent weeks to trigger buy orders, however in my opinion the long-term outlooks remain intact.
To be clear, these purchases are not a sign of bullishness on my part but rather an opportunity to invest in strong companies at reasonable valuations. Also, after primarily selling into strength from December through March, my equity exposure was below the preferred level. If markets continue to move lower in the coming weeks it’s likely that I will continue to add equity exposure. However, for the time being, I remain a believer in long-term Treasuries over stocks.