Week 1 (May 1 – 4): Uncertainty about the Fed, a flattening yield curve, and China trade issues are offsetting strong earnings and a higher rate of economic growth. The result is a trading range for stocks. Eventually, something must give and the market will head one way or another. Hopefully, that will be another leg up. For growth stocks, consider DAN and HUN. The best ETF is EWS and the best mutual fund is FKCSX. The best dividend growth stocks are MAIN and BA. For high yield, AWF, LDP, PSF, and GOF are good bets among CEFs. Good Investing!
Adjustment from April: I recommended an Argentine utility company EDN that is very profitable and growing more so over time. However, the Argentine currency problem continues to worsen which creates a currency translation problem for EDN. Eventually, EDN will become very cheap and a great buy, but may continue to fall in value due to the weakening Argentine Peso in the nearer term. Either get out of any position you have now and wait until the Peso stabilizes before going back in or wait to start a position in the future when EDN is a better buy.
Week 2 (May 7 – 11):
Money is coming back in. The bull is once again ready to resume its run. Buy JLL, GHDX, QNST, and CVRR as growth stocks. CVRR is also a dividend growth stock. Buy the ETF FTXL, but be ready for some volatility. The best mutual fund is SMPSX. I also have bught a little TVIX for assurance against future volatility as it is down into the $5’s. Good Investing!
Week 3 (May 14 – 18):
The market seems to wake up and eat Korean fish snacks every morning for breakfast. But then, after realizing it’s mistake, it recovers. I’ll call that the state of the market for now. Luckily, all things wear out: Strong and steady gains, turn to a sell-off. A sell-off turns to Korean fish snacks and volatility. Korean fish snacks and volatility then turn into another leg up . . . eventually? Be prepared. That said, consider the ETF for small cap industrials PSCI. Then consider the dividend growth stock PGR. For a mutual fund, consider FKCSX for small cap growth. If you want dividends and potential growth there is insider buying in GHY, which seems like a bet on interest rates going up. Good investing!
Week 4 May (May 21 – 31):
I wanted to let market volatility play out a bit before making recommendations for this last period in May. Buying the current dip should pay off. Dividend growth stocks are AYR, BP, TEGP, and NRZ. A good growth stock is HFC. The ETF for growth is XLY. The best mutual fund is TEFQX. High yield junk bond funds and preferred CEFs have net asset values that move in the opposit direction of interest rates, just like with bonds. At some point, interest rates will likely continue to increase which makes these funds risky. With the exception of maybe BIT, I’d avoid those. Good investing!
