Steve Blumenthal, CEO of CMG Capital Management Group, stopped by the studios of theStreet in New York to talk with Gregg Greenberg about some of the ETFs in the CMG portfolio. See the segment here: Four Hot ETFs With Strong Relative Momentum.
Gold has been shining so far in 2016, rising 16% compared to a flat S&P 500. Blumenthal does not expect gold to lose its luster anytime soon. “We view gold as a hedge against the irresponsibility of central banks,” said Blumenthal, adding that it is in a “cyclical bull trend.” Blumenthal has a 5% gold weighting within CMG’s total portfolio solution, owning the Van Eck Merck Gold ETF (OUNZ) . He said he could take that position up to 10% considering the precious metal’s momentum.
He is also bullish on the SPDR Dow Jones REIT ETF (RWR) , which is up 3% so far this year thanks in large part to increasingly dovish talk by the Federal Reserve. Blumenthal admits that a more hawkish sounding Fed could hit REIT prices. For the time being, however, he said the sector has momentum.
Valuations on the market, looking at median P/E is 22.6 at the end of March. That’s a higher valuation level than where we were in 2007, at the top of the last financial crisis. Stocks are richly priced. We’ve reduced our equity exposure and we hedge equities.