Week 1 (June 1 – 8):
The economy is just right. Short-term calm and low volatility usually create a “smart-money” outflow and a short-term dip that you should buy . . . maybe by tomorrow. Consider the growth stocks GTES, and OFG. Look at the ETFs: XLI, PSCI, and XSD. Good dividend growth stocks are CVRR, STX, HCLP and TRTN. No one can predict the future or the next recession so all attempts to do so are merely noise. Trump’s anti supply side trade policy will probably be the culprit for any economic slowdown or recession. It is a job and growth killer and will eventually offset the supply side boosters of deregulation and tax cuts. Just when that will occur is anybody’s guess. Good Investing!
Week 2 (June 11 – 15):
The Fed raises the expected GDP growth rate and becomes more hawkish in terms of adding one more interest rate hike to the previous three it planned for the year. Between the Fed getting ready for the next recession by raising short-term rates (the discount rate directly and the federal funds rate target rate range) and Trump trade tactics that may or may not produce results, the seeds are being sown that will lead to a recession, but one that is most likely far, far down the road. With an unlikely near term recession as the background assumption, I’d consider growth stocks such as: CVX, CVTI, SIM, MKSI, TALO, and TOELY. Good dividend growth stocks include M, GIS, LYB, BXM, RMP, NEW, BGS, TRTN, and especially T. Thanks to the reduced North Korean nuclear risk, an ETF you might want to consider is FKO. Good investing!
Week 3 (June 18 – 22):
Trump trade tactics v everything else = increased volatility appears the theme. Personally, I’d like to pull all our companies out of China before the steal all our technology. Their command economy government doesn’t yet realize the extent of their unfair trade practices even though we have given them most favored nation status (MFN) in trade which eliminates trade barriers in exchange for an implied agreement that the Chinese behave like good trading partners. Time for Congress to rescind MFN to the Chinese. Trade talk still isn’t tough enough to get through to them. Thus, this must continue and even escalate. At some point the stock market will get used to it and simply price it in.
For growth, consider the stocks APC and DIOD. APC also pays a dividend. Dividend growth stocks to consider include BSM, CQH, CLNS, and NEE. Strong growth ETFs are PSCH, FDN, FYC, and BTEC. The best mutual funds are KSCOX and TEFQX. Mutual funds require a substantial initial investment but ETFs do not. Good investing!
Week 4 (June 25 – 29):
Traders that overreacted on Monday created opportunities for those with diversified portfolios cash on hand. This is likely to occur again so be ready. I’d also have some TZA in my portfolio as a hedge. In the meantime consider DLPH, PGR, ARCB, and ADBE for growth. ETFs to take a look at include IHI, IGM, and FTEC. Mutual funds are FBSOX and HCEGX. Let us hope that June ends well. Good investing!
