Tom Forester — whose Forester Value Fund was the lone stock fund to make money in 2008 — tells MarketWatch that he’s now only holding a small portion of his portfolio in cash, has dropped his hedge positions, and sees more upside than downside in the market for the next three to five years.
“It has certainly helped the fund’s performance that this self-proclaimed ‘low P/E buyer’ has no qualms about moving heavily into cash, or betting against the market if he believes stocks are overvalued, as he did through much of last year,” MarketWatch’s Jonathan Burton writes in discussing Forester’s 2008 success. “[But] nowadays, Forester is ratcheting up the portfolio’s risk, taking what he called a ‘neutral’ stance and setting the stage for a more proactive approach. Cash represents about 7% of the fund, and he’s removed the hedging positions.”
“The defense that we’re playing is through stocks as opposed to raising cash,” Forester said. “We’re just going to average in over the next few months.”
Forester offers several of his current stock picks in the article, as well as his take on the broader market: “Over the next three to five years I think there’s a lot more upside than downside,” he said of the S&P 500. “Two years ago I thought the opposite.”