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May 2023 Stock and Fund Picks

May 30, 2023: Assuming the debt ceiling FUBAR fades into the rearview mirror, the Treasury will have to rebuild the cash reserves it exhausted during the long period of "special measures." This cash rebuilding process involves bond sales which will also be good for inflation because it will compete for excess money in the economy. Unfortunately, it will also and create an alternative to buying stocks for a time. During the second half of this year the stock market should…

March 2023 Stock and Fund Picks

March 12: In the 1930s bank runs occurred because a bank only had to keep a fraction of its total checking account deposits on hand for cash withdrawals and because bank deposits were not insured by the FDIC. Consequently, depositors could panic and try, in mass, to withdraw their funds up to the point the bank had no more vault cash or teller cash. Now most banks and credit union deposits are insured. Consequently, bank runs decreased dramatically because depositors…

December 2022 Stock and Fund Picks

December 28: The best guess as to how far along the Fed is toward raising the Federal Funds Rate is that it is about 70% complete. The most vulnerable area is equities and associated company earnings, all of which appear to have an average of about 10-20 percent more to fall. If you are throwing darts to pick equities, then I'd build up some cash and wait about 6 months or so to start buying. One upside is the equity…

October Stock and Fund Picks

October 20: The status quo seems like endless doom and gloom. Yet, we know with certainty that bear markets always end. Moreover, it's end will come as a surprise to most. One possible scenario is that inflation continues to abate and the Fed pivots and announces an end to large rate hikes. Suddenly, earnings growth and job creation are enough to send the stock market soaring. Thus, you don't want to sell. On the other hand, killing inflation requires reducing…

August Stock and Fund Picks

August 30: It appears we bottomed in June. After which July was characterized by a stronger than usual bear market rally. At this point we are back in the FED's grip of higher interest rate expectations and with no growth or value catalysts in sight that could shift us into another Bull market. Consequently, it appears that floating rate funds benefiting from higher interest rates are the most in favor. A discounted floating rate fund such as VVR that currently…

July Stock and Fund Picks

July 27: The state of the economy is that it appears that only the end of inflation, Fed tightening, or the war in Ukraine will kick things into a positive direction. As it is, the leading economic indicators (LEI) have fallen for four months in a row while the coincident and lagging indicators still remain positive. Luckily, LEI is less accurate at predicating a recession than an economic recovery. On the other hand, the IMF now appears to fear the…

June Stock and Fund Picks

June 29: Not much has changed during the month. Expect uncertainty and pessimism regarding Fed tightening and the likely outcome along with geopolitical fatigue to continue dominating the markets. Markets have been down hard during 17 weeks this year and moderately positive in only 8 weeks. Like all trends, it will run out eventually. In fact, once all negativity is price in any good news will start a recovery that could be quite strong. Given this, some growth oriented stocks…