The threat of a North Korean nuclear war has some people scrambling to buy iodine as an antidote to radiation poisoning. I’m not concerned about WWIII breaking out, so today I increased my holdings in large US Banks by purchasing SPDR’s S&P Bank sector ETF- KBE. This brings my portfolio exposure to US Banks up to around 10%, combined with earlier purchases of JPM & GS.
US Banks have been waning lately, KBE’s price has dropped below its 200dma. The concern is that deflationary pressures might not raise interest rates as much as previously expected, thus jeopardizing bank’s profits on the spread. I think large US Banks will do fine, especially with a less aggressive regulatory environment in Washington DC. The banks are flush with cash and plan to spend billions on buybacks. Long term, the sector is healthy.
On the slim chance there is a nuclear war…emerging from the wrecked debris of civilization will be cockroaches and bankers…so KBE should do just fine.
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