July 6: Looks like the stock markets are topped out and dependent on earnings increases to move them any higher. The sector doing the best during the last 3 months appears to be health care as indicated by the first three top ETFs: XLV, IYH, and VHT. The top 5 ETFs include two related to Canadian stocks: FLCA and BBCA. Since the overall market is not likely to move much in the near future, there are still some specific stocks to consider as follows:
For Growth: MARUY, MATX, ARCB, USAK, VALE, PCH, RIO, ORLY, ULTA, KMX, SID, PTR, CWH, and CLF.
For Dividends and Growth: RIO, SBLK, VALE, CIG, ET, KEP, SCU, OMF, SFL, and SKM.
The closed end fund (CEF) market is also pretty much tapped out. In other words, there are only a few funds trading at discounts and all of the really solid funds are trading at significant premiums. This hasn’t been anything but good for my CEF portfolio though. Gains from simply holding them have been fairly steady for most of the days and weeks during the last few months. This is probably because I bought most of my CEFs a long time ago at steep discounts. After significant and rapid gains in portfolio value over the last year what remains are sold CEFs at premiums On average, these premiums are inclined to slowly increase during this apparent market “calm.” I’ll take that any day!
Market volatility appears insignificant and will probably remain so unless inflationary expectations increase. That will happen only if investors feel that inflation is more than a temporary supply-side phenomena. There is a clear supply-side labor shortage in the developed countries, including the U.S, and even greater labor and other supply related problems in emerging economies for which vaccination rates are still very low. These problems could drag out a temporary problem into the long-run. If so, market volatility will increase dramatically and the potential for a Fed policy mistake will increase. Let’s hope that vaccination rates increase more rapidly and that none of this happens. In the mean time, good investing!
