Back in January 2007, Jim Stack, editor of Whitefish Montana's InvesTech Research and Portfolio Strategy, surveyed the U.S. economic landscape and didn't like what he saw. There was a growing risk of a recession, he thought. The residential real estate market was unwinding. Stack shared his worries with readers that month..
"If complacency breeds danger," Stack wrote, "then we might be sitting on a powder keg heading into 2007."
Stack positioned his portfolio in a defensive crouch, believing that the degree of risk out there, in his opinion, warranted higher caution. He avoided the financials and real estate-related sectors. His cautious bets have payed off. His managed accounts, year-to-date, are up 8.1%. That beats the 5.6% gain of the Dow Jones industrial average and the 2.2% increase of the S&P 500.