Trump remains the stock markets worst enemy. True, China is a problem. They cause 95% of our trade deficit, steel our technology and intellectual property, and respond to our complaints with a trade war. Re-allocating plant and equipment from China to Mexico may seem plausible but it is likely that Trump would sabotage that. Re-allocating capital to the US would only lead to less efficient production, higher prices, inflation and increasing demand for workers from Mexico. Trump would oppose the last, making all the negative consequences much worse.
Trade and other fears have increased market volatility, but the macro economy and earnings growth remain strong. We also don’t know how the contradictory supply side policies of anti-trade v. tax and regulation decreases will play out. We hope that the latter will be enough to give us net gains. With that, I’d recommend the following stocks: ARC, DYN, NTNX, and WMS. Dividend growth stocks that are also more defensive in nature are: HAS, MO, CVS, WBA, and T. An excellent mutual fund is FDLSX. A good high-yield dividend stock is ETP with a dividend coverage ration of 1.3 and a yield of 13.3%.. Some excellent ETFs are XAR, FTXL, and JPMV. An oversold CEF (closed end fund) is EOI. An undervalued REIT is EPR. A CEF that specializes in buying undervalued CEFs goes by the ticker CEFS and yields about 8%. Good investing!
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For week 2 (April 9 – 13): Can’t predict the market other than expectations for this upcoming earnings period are high. This might backfire if actual earnings disappoint. Geopolitical and trade risks remain a problem. That said, consider stocks such as MT, X, CC, CEIX, and RUTH. ETFs to look at include PPA, FBT, ITA, JPMV, and FTXL. Some of these pay dividends but are primarily growth oriented. The least risky is JPMV. CEFs with higher yields are FLC, JFR, and PFO. Each of these has a yield greater than 6% and pay monthly dividends. PFO and FLC are also undervalued relative to their net asset values. Mutual funds for growth or yield are BXPIX and FAGIX, respectively. Good investing!
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Week 3 (4/16 – 4/20):
For growth stocks, consider WLH and KURRY. For a growth oriented ETF consider XAR and FTXL. An excellent muni bond fund (avoid federal taxes) to consider is TAIX. The market correct appears over. The FED has yet to prepare sufficiently for the next recession by raising short-term rates (federal funds rate) and causing it to occur anyway. Earnings season and stock buybacks should propel the market forward. Anti-trade policies that are also anti-supply side polices are the only headwinds to worry about.
Week 4 (4/23 – 4/30):
It’s all about trade with China on the negative side versus earnings growth and economic growth on the positive side. In fact, economic GDP growth has nearly doubled from 1.5% for 8 years under the socialist Obama to about 2.9% under pro-market Trump. Stick with and maybe add to BA and KRE in the base portfolio. I’d also begin a position in EDN if you want long-term growth in a defensive and international sector. Start small and add to it on down days. Watch the MACD and RSI for indication that it’s price is turning upward. Consider AAXN if you want a stock within one of the top investment sectors in the U.S. For high yield in really good funds consider AWF, LDP, and GOF. For dividends and growth there is always MAIN. Notice how I’m getting really, really picky. Good Investing!
