May 23, 2017 • Last updated: May 23, 2017
    Should we avoid cyclical stocks?

    To invest based on Jitta Ranking, should we avoid bank and real estate stocks since bank stocks tend to be affected by the economy and real estate stocks have irregular profit cycle? Actually it’s up to your investment experience. You can invest if you have a certain level of experience and an understanding of the basic foundation of banking and real estate businesses. There are some good banks with prospect of long-term return. For real estate, if you understand the business cycle, we can invest for a good level of return. Otherwise, you should avoid or invest only a small proportion of your portfolio, or invest in low risk businesses instead, such as retail and restaurant.
    For those without a lot of investment experience, Jitta Strategy recommends that you invest in at least 5 stocks without more than 2 in the same industry. In the long run, you should get better return than the index. Also, if you want to invest with low risk, buy only consistently good quality stocks. In case of banking or real estate businesses, if you see inconsistent Jitta Score (below 5 in some years) and high Loss Chance, even though they are high in Jitta Ranking, you should not buy. Rather, invest in the least risky stocks because there is very low chance of permanent loss from high quality assets.