The October sell-off has created opportunities for stock pickers.  On the other hand, Friday’s hot inflation read means the market is now sure of a Dec. Fed rate hike.  As Warren Buffet warns,  “Interest rates are like gravity to stocks.”  A more mechanical rationale for this phenomenon is that the higher the interest rate the higher is the discount rate on expected future earnings for stocks.  This simply lowers their present values.

If you’re cautious like me, simply hold cash or near cash funds that pay a dividend tied to short-term interest rates.  Cash isn’t going to change its value much, if at all.  The dividends, however, will increase along with Fed rate hikes.  This will also tend to increase the value of these funds over time.  For example, you can hold JPST, ICSH, USFR, and FLOT and be safe given the markets increased volatility.  Moreover, a severe sell-off leaves you holding money that you can then convert into opportunities in much lower stock prices.

In the meantime, some growth stocks you might want to consider are ARC, CRC, MOS, and USAK.  Growth oriented ETFs to look at include JJOFF, BJO, HDV, XLV, IHI, DGRO, and MGV.  Two good dividend growth stocks are AUO and MCY.  Good investing!

Week 2 (Nov. 12 – 16):

When you don’t like the market, be defensive.  In other words, making money requires positioning for the prospect of belter opportunities.  I am holding only ICSH, JPST, and FLRN.  If the market improves and doesn’t crash I will look at SPHD, PEY, and BST.  The main problem is that tariffs will drive the global economy into a recession and take the US with it.  The Fed can only accelerate this process by raising interest rates too fast.  They probably won’t though as they are aware of the global economic slowdown caused by tariffs.  However, failing to raise rates as expected will send a bad signal to the markets.  A crash might follow.  If you expect a crash, be in cash!  Good investing!

Week 3 (Nov. 19 – 23):

The market will either get better, get worse, or stay the same.  To end getting worse, there must be large volume and disorganized or panic driven sell-off.  Until then you must wait by holding cash in the form of ICSH, FLRN, JPST, USFR, and TFLO.  The Fed looks only at the economy to see if tightening and unloading its balance sheet assets continue to make sense.  To the stock market it looks like the Fed is taking the punch bowl away from market partiers.  That’s why you continue to hear from brokers things like, “. . . the Fed knows nothing!”  I’d ignore that.  The Fed must dampen inflation expectations by being a bit overly aggressive, not invert the yield curve, and sell its financial assets to keep the economy from overheating in the short-run.  It’s only the short-run that it can manage. So ignore that noise about the Fed.

The real problem is that Trump’s tariff policies are probably going to cause a global recession from which the US can not escape.  Dealing with the Chinese is required, but be done differently so as not to adversely effect our main trading partners in the EU.  Having the Congress take away  Chinese most favored nation (MFN) status would be a better strategy.  Prohibiting our companies from engaging in joint venters with the Chinese would be another.  Incentivizing companies to move their international operations to countries other than China is yet another strategy.  One could go on but you get the point.

If you want to consider a short-run growth stock try CONN.  Another thing to consider is the iShares Evolved Health care staples ETF which uses the symbol IEHS.  Otherwise, hold cash.  In the long-run, interest rates may continue an upward trend as the Federal budget will soon be comprised of only nondiscretionary entitlement expenditures such as Social Security.  All discretionary expenditures such as military funding will then require additional borrowing.  If a socialist is elected president, then there will be even more discretionary expenditures associated with government income redistribution that will require even more borrowing.  Moreover, the supply side of our economy will be destroyed and this represents our tax base.

This will put us in a situation like Greece.  Already, our gross national debt is above 100% of our economy’s GDP.  Before Obama, it was only 50%.  Naturally, Obama’s Keynesian fiscal stimulus expenditures not only failed to pay themselves back, they made everything worse.  Because of the rise of socialists, this situation is more likely to repeat itself than not.  Thus, you might want to just hold cash forever.  On the other hand, if the stock market gets low enough opportunities may once again appear.  Until then, good investing!

Week 4 (Nov. 26 – 30):

The Fed has softened up and considers the secular decline in the neutral discount and Federal funds rate targets as near.  That leaves the problem of trade protectionism of the Trump administration as the remaining headwind and major global problem.  Markets are on edge as the G-20 summit begins.  If China and the US have a more or less pleasant meeting, then the market should react positively.  Still, don’t expect a deal.  Eventually, trade protectionism that continues  will lead to a world-wide economic collapse.  Already the negative effects of employment loss in export industries and higher production and consumer costs (inflation) are showing up in the US.  Things can get much worse as continued protectionism will simply support a continuation of this trend.

In the meantime, those that want to be in the market might look at TITN and ABG as potential growth stocks to add.  A good dividend paying ETF is HDV.  Some defensive oriented ETFs that pay monthly are SPHD and PEY.  I also like JRO, DHS, and PDT for dividends and growth.   Three good dividend growth stocks are VLO, MO, and T.    A defensive but growth oriented ETF is IEHS.  The preferred stock LDP is now at a substantial discount to NAV and pays over 8%.  I would continue to hold cash or near cash funds like TFLO, JPST, ICSH, and USFR as the largest part of your portfolio.  These will reduce portfolio volatility and produce monthly dividends.  Good investing!

The post November Stock and Fund Picks first appeared on MarchéEconomics.

Headwinds from trade wars are on the way.  This, as indicated in the February Stock State, is our biggest stock market worry.

Why are tariffs on steal and aluminum such a problem?  Trade theory, not stock market talking heads, is the answer.  Tariffs on specific commodities imposed by a large nation such as the US will effect the global price by reducing demand from a large (the US) importer.  This hurts all steal and aluminum manufacturers in the rest of the world and will lead directly to retaliation.  This starts a trade war.  I would not invest in the market in 1929 when the Smoot Hawley trade act had its worst effect.  International trade contracted by about 2/3s.  All trade related jobs (manufacturing, farming, transportation, shipping, inventory, etc.) were lost.  Export markets disappeared and caused farm production prices to plummet.  Farmers went broke.  A global recession ensued.

Market strategy is to go 100% to cash and wait until the consequences of the coming trade war are over.  You can play with the TVIX, for example, with your cash.  Wait for the TVIX to fall, buy some, and then sell it when it goes up, and then repeat.  That’s the only safe thing to do at this time.  I would normally say good investing, but that is no longer possible.  Good luck!

Marche 4 update:  

Presidents do good and bad things.  For example, Bill Clinton was a pro trader.  That, and the luck of low oil prices and computer technology adoption into work places that increased productivity provided supply side effects that overwhelmed Clinton’s higher taxes, military spending cuts, and Congressional social program cuts.  In effect, contractionary fiscal policy became overwhelmed by positive supply side effects.  Good or lucky aside, Clinton went on to restrict CIA recruiting and eliminated SEC oversight of derivatives.  These policies contributed to 911 and the Great Recession.

Obama attacked the economy while at the same time trying to stimulate it with deficit financed fiscal spending.  The weakest recovery on record occurred, along with a doubling of the US level of public debt.  In other words, before Obama, the US had about a 50% level of public debt to GDP and after Obama The US public debt to GDP ratio jumped to over 105%.  On the other hand, we did get Obama care.

President Trump is no different.  Cuts in Obama’s overregulation and corporate tax cuts are tremendous supply side effects that are good for the economy.  Moreover, expanding the tax base through economic growth will reduce the negative effects on public debt.  By contrast, recent protectionist trade policies are a huge and contradictory offset, mush like the contradictory macroeconomic policies of Obama.  Trump’s trade policies will cost jobs and economic growth even if there is no retaliation.  Users of steel and aluminum now face higher costs which contracts output and reduces employment.  Higher costs are then passed on to consumers.  The total cost to consumers averages about 10 times the value of any jobs saved in the protected steel and aluminum industries, causing the US to lose wealth, growth, and employment.  Worse, trading partners that previously sold steel and aluminum to the US have lost demand from a large importer and will face lower global prices as a result.  They will surely retaliate by imposing tariffs on our exports.

The World Trade Organization (WTO) oversees and enforces all international trade agreements and will soon rule on the legality of the steel and aluminum tariffs.  Most likely they will rule them illegal.  But, if they do Trump, as an isolationist, he may pull the US out of the WTO.  That will undermine the WTO’s credibility and its authority to oversee international trade agreements.  The world trading order may then unravel.  Trade agreements would become unenforceable and many nations may follow the US example of imposing tariffs on imports.  Soon no one will import (i.e., mercantilism where everyone wants only to export and have a trade surplus) and no trade will occur.  The world will then spiral into a deep recession.  Only a reversal of trade policy back to free and open trade will lead to recovery.

In the short-run, it is difficult to predict how markets or our trading partners will react.  Markets may settle down for a while before there is another round of volatility and sell-offs, or a bigger sell-off triggered by more immediate trading partner retaliation will occur.  Already, the agribusiness sector looks shaky.  Only time will tell.  One must prepare for any and all possibilities.  Trade theory prediction will be more accurate in the long run, but many scenarios are possible.  Even if the WTO rules in Trump’s favor, for example, other nations may sill follow the US example and impose trade restrictions of their own.  Time will tell how the dominos fall, but fall they will.

The post March 2018 Stock State first appeared on MarchéEconomics.

I am always amused when I hear a stock described as “poised for explosive growth.”  It’s a catchy line but the same holds for any stock in the market.  Odds are, you will be right some of the time.  The only thing I will say about my stock picks is that they are subject to rigorous research and systematic screening and that some of them, even in the short-run of only a month, will perform well.  The others may pick up speed after a longer period.  Thus, I am no longer wanting to offer their relative performance over only a short period such as the previous month.  That said, here are those stocks and funds that you may want to take a closer look at as potential additions to your portfolio.

For growth, consider BIVV, MGLN, IT, AYX, BGG, EFSC, EGBN, TBK, and SF.  For dividends and growth, consider SCI, LAD, PRI and CG.  Growth funds to look at include IUSG, IVW, JKE, MOAT, and IWP.  You also may want to consider a closed in fund (CEF) selling at a discount that yeilds 8.7%.  The ticker is DPG and it is in the defensive utility sector, but still a reasonable consider ration for a portfolio balanced in terms of offense and defense.  Not a lot of people think about that aspect of portfolio balancing or diversification.  MOAT is also an offense/defense fund.  Of course funds also offer more diversification than do individual stocks.

Take advantage of the recent re-set in the stock market, but don’t be in a hurry.  You knew it was going to happen because January was just too good.  Get in front of those sectors, stocks, and funds, that are once again going up.

You may notice that I don’t recommend trading options.  Those are for traders not investors.

Good investing!

Week 2 (February 12 – 16):

Things look like they are picking up again.  Even the hotter inflation number, which I was waiting for, failed to slow the market for long.  For dividend growth stocks, consider MAIN (pays monthly), KIM, SEP, and OTC: TRSWF.  For growth take a look at SODA, ETFC, ALL, and JPM.. Funds I like are IVW, IWF, and FNI.  Some oversold reits that now pay higher yields are VTR, OHI, and STWD.  Good Investing!

Week 3/4 (February 20 – 28):

Switching from one regime in which the government tried to stimulate the economy with expansionary monetary and fiscal policy on the expenditure side and at the same time kill the economy with overregulation on the supply side to a replacement regime in which contradictory macroeconomic policies become consistent supply side policies that lead to real and expansionary economic growth associated with an actual economic recovery is, to the stock market, somewhat like sailing through seas where the Atlantic and Pacific oceans collide.  Eventually, the stock market will adjust to a long-awaited real economic recovery as opposed to an asset bubble that formed because money only flowed into excess bank reserves and the stock market.  The “sea change” involves more volatility and concerns over inflation, the dollar’s falling exchange value (which is good for exports but inflationary for imports), and rising interest rates in the bond market that signal the end of the bull market in bonds.  Already, betting on a long declining VIX has wiped out some unwary investors.  Quixotic fears of heightened inflation, higher interest rates, and overly aggressive FED tightening will eventually fade.  Until then, expect a bumpy ride.  Earnings and economic fundamentals have improved significantly and the stock market will eventually catch up.  Buy on the dips.

Stocks to consider for growth are MA, RCL, and CTSH.  Dividend growth stocks to look at include:  AM, MMLP, SKT, FUN, BPL, and EPD.  Leading funds are FV and SOXX.  Just so you know I don’t like guns or cigarets so I avoid recommending their related stocks.  In the meantime, Good Investing!

The post February Stock and Fund Picks first appeared on MarchéEconomics.

Bond sector money flows are one way to see how this might happen.  As the FED sells bonds to reduce its balance sheet and increase short-term interest rates, the value of unmatured bonds will decrease.  This is because the value of a bond varies inversely with the market interest rate for those bonds.  Moreover, either the interest rate can change and cause the value of bonds to change in the opposite direction of the interest rate change or the value of the bond can change and cause interest rates to change in the opposite direction..

An example of an interest rate change that causes an inverse change in bond values is as follows.  If you have a $1000 bond that never matures and pays a stated or fixed return of $50 per year, the corresponding market interest rate must equal 5%.  This gives $50/.05 = $1000.  Only the stated return of $50 is a constant value.  Both the $1000 bond value and the market interest rate of 5% are inversely related variables.  By contrast, if the market interest rate climbed to 10%, this same unmatured bond would now be worth $50/.10 = $500 in the open market.

This process is underway at the FED.  Specifically, as the FED sells bonds to decrease their value and thereby drive up interest rates we can expect people to sell unmatured bonds to avoid the expected capital losses.  The bond market is huge in that it is about twice the size of the market for stocks.  Cash from bond sales must go somewhere and most of it will go into stocks and drive the price of stocks higher.  At some point, on the other hand, those holding stocks will see higher rates on less risky bonds as a better alternative and the money that flowed into stocks will reverse and  flow back into the now higher yielding bonds.  This will look like what happened during the stock market crash in 1987.  The crash may cause a sudden V-shaped sell-off as in 1987 in which stock buying followed the sell-off.  On the other hand, it may cause a recession so that the stock market has a flat, bear market bottom.

One way to prevent the FED from causing a sudden and severe stock market sell-off from its activist monetary policy is to require the FED to follow a monetary rule that will maintain a so-called “neutral” short-term interest rate.  Such a rule might be related to the difference between a target inflation rate such as 2% and the actual inflation rate and the difference between a full employment GDP growth rate and the actual growth rate.  This is the Taylor rule.  If, for example, the actual inflation and GDP growth rates are above their respective target rates the FED would be required to sell bonds and cause an increase in short-term rates.  If, on the other hand, actual inflation and GDP growth rates are below their target rates then the FED would buy bonds to increase their value and thereby decrease short-term interest rates.  In both cases, it follows the monetary rule rather than to act with discretion.  Having the FED follow a monetary rule means that the state of the economy determines FED actions.  without the rule, FED actions tend to involve attempts to actively manage the economy based on the whims, fancies, assumptions, political influences, attitudes, or beliefs of the FED chief and board of governors.

As long we the economy is not characterized by stagflation in which the actual inflation rate is above target and the actual GDP growth rate is below target, the Taylor rule will work as guide to FED actions.  In a period of stagflation any monetary or fiscal expenditure stimulus aimed exclusively at the expenditure or aggregate demand side of the economy will fail because only an increase in inflation will occur.  Instead, policies with predominant effects on the supply or production side of the economy are effective because they increast the GDP growth rate and reduce inflation.  Such policies may include tax cuts, but policies such as reducing regulations that, in turn, reduce production costs and incentives for greater private investment that increase productivity, which also lowers production costs,are effective.

Fiscal expenditures on public infrastructure investment also increase productivity and lower production costs.  While the short-run effects on aggregate demand are inflationary, the longer-run effects are on the supply-side of the economy through increased productivity and lowered production costs put downward pressure on inflation while simultaneously stimulating  production and GDP growth.

The post Activist Monetary Policy Conundrum first appeared on MarchéEconomics.

In the near term, the January 19th government funding issues looms as a potential road bump that may increase volatility.  Trump has the Democrats in a tight spot in that they want DACA and will only get it if they agree to fund the border Wall.  Don’t expect that to go smoothly.

This tax cut, like the Kennedy tax cut and Reagan tax cut in the early 1980s will have longer lasting supply side effects than the deficit financed fiscal expenditures under Bush and Obama that occurred on the basis of Keynesianism.  Obama doubled the national debt but didn’t get any significant economic growth to show for it.  This is because he tried to kill what he tried to stimulate.  Regardless of the misguided Obama, Keynesian fiscal stimulus multipliers have only short-run effects because multipliers go quickly to zero and the expenditures never increase economic activity enough to pay for themselves.  On the other hand, supply side policies are not limited to tax cuts..  The more recent regulatory reductions reduce costs, increase market opportunities, and have long-lasting supply side effects.  They may also be a larger and more long-lasting effect than the tax cuts.  Thus, it could be that the market is actually underestimating the supply side stimulus effects of the Trump agenda.  Any infrastructure expenditure will also increase productivity and have long-lasting supply side effects as well (along with the usual short-run expenditure effects). Unfortunately, the Obama debt build up to greater than 100% of our GDP limits the likelihood of any such expenditure making its way through congress.

On the negative side.  Bull markets will come to an end if there is greater than a 20% sell-off.  The best way to protect your portfolio is to increase the percentage of cash you hold or go completely to cash before it happens.  Short of such a big correction, any sell-off within the context of a bull market will be smaller and have a V bottom implying it is short-lived.  Those you can ride out.  All indications are that you can, if you have cash, buy these dips until it is time to get out of the market entirely.  I’ll let you know when I see that time approaching . . . possibly by this Spring or Summer.

January 23 update:

GDP growth is about to double that of the previous administration and we now have an actual economic recovery and expansionary business cycle phase for the first time in 10 years.  Basically we have switched from a monetary stimulus bubble in the stock market caused by contradictory macroeconomic policies.  These are an expansionary expenditure side policies (fiscal and monetary stimulus) versus contractionary supply side policies (i.e., regulatory overreach) under Obama that led to money growing into bank reserves and the stock market but not to loans and  investment.  Under Trump we now have consistent stimulative policies on both the expenditure and supply sides of the economy that create a real expansion that includes private sector investment rather than merely a stock market bubble.  In other words, the tax cut plan will have a short-lived multiplier effect on the expenditure side of our economy and a longer run supply side effect through greater investment, growth, and jobs.  Coupled with decreased regulatory compliance costs, another long-run supply side effect, the implication is to put cash to work.   Continue to buy the dips. 

The post January 2018 Stock State first appeared on MarchéEconomics.

Do not follow the herd, especially if it appears panicky.  You’ll just run off the cliff with everybody else.  If spent all your cash because you thought this correction would be like previous ones that were short in duration, just act like Warren Buffett and be patient.  All good things come to those who wait.  Amazon and Facebook both sold off earlier this year.  Jumping out of them when they did just cost you money.  They soon bounced back and if you held on to them rather than sold them you made more money.

There will always be noise out of Washington but the domestic and global economy is strong and getting even stronger so there is no recession.  Earnings were generally good and are continuing to improve.  Economic data support continued growth and expansion.  Which matters more in the long-run, short-lived political noise, a tax bill, or strong economic and company fundamentals?  You know the answer so invest accordingly.

In the mean time, profit taking and panicky selling will get over with when it does.  This will only be good for the market.  Be ready for that.

December 27 update:

Positioning for next year is the theme.  Mostly, commentators favor tech and financials.  Zacks estimates 4 S & P 500 sectors may double in 2018.  These are Energy, Materials, Rate driven financials, and information technology.  The most attractive sectors according to Zacks forecasters are Information technology, Consumer discretionary, Materials, Industrials, and Energy.  Funds and stocks in my portfolio that are consistent with these areas are FTEC, WLK, FAS, BA, CAT, SEDG, NAIL, DXC, PAYC, HASI, CRM, TXN, SOXL, NVDA, VMW, SKYY and FAS.  For greater stability I also hold a lot of STZ, which fits into consumer staples and consumer discretionary quite well.  You should check your own portfolio for diversification, stability, and emphasis.  The stock market always looks ahead and so to should you.

It is likely that tax cuts that lead to increased earnings and stock buybacks during 2018 will reduce PE ratios (the increasing in earnings) and make the market look less overbought.  Scarcer stock will make the market want to go up for that reason as well.  The US economy is steady with increasing rates of growth and earnings which supports stock prices.  The bull market is held with skepticism by many which is also good because it means the bull has more room to run.  Invest accordingly.

Some general principles are to stay diversified among economic sectors (eg., tech, finance, industrials, international, money) so that any type of rotation out of one area such as tech is offset with buying into other areas.  Keep some cash on hand for dips and pull-backs.  As opposed to a rotation, significant sell-offs might be hedged by using cash to buy TZA or TVIX.  Good investing and Happy New Year!

The post December 2017 Stock State first appeared on MarchéEconomics.

We keep doing what works until it doesn’t.  Be careful about buying on small dips while assuming that tomorrow the market will upon on the upside.  This may quit working with tomorrow becoming another down day.  This is characteristic of a stock market that rolls-over into a larger correction . . . which we badly need.  Given a larger correction of say 3 – 5% a global bottom, as opposed to the daily local minimums, you may have bought into.  I would keep my powder dry (hold more cash) and buy some TVIX or TZA.  Once we see how this current situation, that looks like it could turn into a healthier correction, plays out it will then be time to go back in.  Good Investing!

November 30 update:

The tech sector sell-off is a buying opportunity.  Some, such as the Chinese stocks like WB, TCENY, and BABA are still selling.  This selling appears related to the tax cut/reform bill which doesn’t benefit Chinese stocks.  These are good stocks selling off for a bad reason.  China is one of the higher growth rate developing economies.  The consumer sector is far underdeveloped and this sector will continue to grow and gain strength for the next 50 years.  In fact, China is in the early stages of a rural to urban migration stage of economic development just as was the US about 75 years ago.  Tax related selling completely misses this point and is, for that reason, way overdone.  Just buy these Chinese stocks and held on to them.  You will not lose.

A note on NTDOY.  It is in the beginning stages of a several year upward move as well.  Hope you got in early enough to take advantage of it.

I don’t think bitcoin or the other cryptocurrencies have finished going up.  Still, I’d wait for a pull back before getting in if you haven’t already.  An easy way t o ride bitcoin is through GBTC.  Always remember that anything that goes up too fast will correct, and probably the correction will be excessive.

Good investing!

The post November 2017 Stock State first appeared on MarchéEconomics.

Outlook and Strategy for June 7, 2017.

Sell-offs or market adjustment in high-flying tech and semiconductors is noticable. Stocks such as ATVI, EA, ADBE, RHT, ADSR, MU, PYPL, NVDA, LRCX, and AVGO have had the fastest run-up and are at the greatest risk for a sell-off or correction. Howver, the bigger name FAAMG stocks that include Google, FB, Netfix, and Amazon have led the sell-off. Questions to ask are 1) are these stocks over valued, 2) what are the implications for the rest of the market, and 3) what do stock and market fundamentals tell us.

I’ll address these three questions in order. First, no, these stocks still have high rates of earnings growth and do not seem overvalued on that basis. Moreover, overall stock earnings are still strong and earnings should to continue their strong rates of growth. July earnings season will be what to watch. Second, the overall market is now driven by earnings growth in travel and leisure (millennial spending on experiences), health care expenditures on insurance, hospitals, biotech and pharmaceuticals, capital investment in emerging markets (a strong area of growth), oil and gas derivatives, the “stay-at-home” economy where expenditures on content streaming and video games is strong, the military defense sector thanks to the N. Korean problem, aerospace, housing where demand exceeds supply, e-commerce due to a change in consumption patterns, and banks due to modest FED tightening. The only weak sectors are autos and traditional retail. Thus, the overall market has more positives than negatives concerning economic growth drivers. Third, market history tells us that late stage market expansion tends to occur in tech and semiconductors, thus we must be concerned that a sell-off in these might lead to a broader sell-off. Also, technical chart analysis shows a tightness in the trading range of the major stock indexes. This implies increased volatility ahead. The risk is that negative news out of Washington leads to a negative break out and wide-spread selling. So read the blog post entitled “Look Out Below” for your own benefit in the event that military action against N. Korea occurs.

That about sums it up. Good Investing!

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July 21, 2017 market update:

We haven’t had a 5% – 10% correction in the S&P 500 for more than a year. some think that a major crash is due because we haven’t had one in 10 years. The crash scenario is unlikely because of the slow recovery that is now only beginning to accelerate, earnings reports are generally good and improving, we still have low interest rates, and consumer spending and expectations are strong.

The correction scenario would actually be good, allowing the bull market will remain as the major market thesis and will even become stronger because of it.

The only reason for a crash or recession would be an internal economic shock due to the Fed increasing interest rates too fast. This appears unlikely because Janet Yellen (the Fed chair) is a liberal dove. An external economic shock due a geopolitical event is not likely, but always a small possibility. That is why some hold gold or cash. Unfortunately, a geopolitical catastrophe is not predictable, hence why recessions are also not predictable. Thus, the best market strategy now is to continue to buy good stocks such as my weekly picks on any dip or pull-back.

Buy Silver Eagles – In Stock, Ships Fast!

The post July Stock State: Outlook and Market Strategy first appeared on MarchéEconomics.

The best I can do now is to combine the 1st and 2nd week’s stock picks for May into one set. These tickers are: ZIXI, BOTZ (a fund for robotics and AI), CELG, AEIS, and ABMD. I expect these to beat the market in the coming month and beyond. Do your research when considering any of them to add to your portfolio.

For fans of monthly pay checks, I put together an abbreviated portfolio of high yielding but safe dividend funds to illustrate how you can generate income from your investments. The following link will take you to this example. Monthly Paying Dividend Funds

If you want to diversify or expand your holdings, you could add any of the following monthly paying funds: SPHD, YYY, PFLT, MAIN, LDP, VRP, LTC, GLAD, EVV, GAIN, and ACSF. Good investing!

Stock picks for the week of May 15 – 19: For those wanting good, reliable monthly dividend payers, consider buying IRT and TPVG. I will add that there is no such thing as a “buy and hold forever” dividend stock or fund. You must review each position about once per month and determine if you still want to hold it. I try to keep my turnover low by doing upfront research, but there is still a need to rotate dividend payers for various reasons (e.g., the likelihood of reducing or lowering their dividends).

For those wanting dividend growth stocks, consider buying AET and FAF. For those wanting growth stocks only, consider buying PXLW and DSGX. The Trump/FBI quagmire threatens to up the risk of US politics spilling over into an economic growth agenda at the same time that forecasts of 3 to 4 percent Q2 growth are occurring. The first relates to to short-run volatility and the second relates to to long-run economic fundamentals and growth. The only pragmatic strategy is to buy my recommended stocks after any significant sell-off or pull-back and hope that long-run fundamentals prevail. Hope you have either cash on hand or a significant position in a hedge like TZA.

Of course you can always wine and dine and buy gold.

Good investing!

First, read “Look Out Below” just in case there is a strong market sell-off, probably led by technology, in the near future. This would be a healthy consequence if it occurred. Ride it out if a long-term investor. Otherwise, hedge your bets. Within this context, stock tickers to consider for the last week of May 2017 are: HQY, IRBT, VEEV, CAMT, WLDN, HOFT, and NRZ. NRZ pays a high yield dividend and offers dividend growth and some capital appreciation. The others are growth stocks that are either cash rich or growing rapidly. Also, review your stocks that are performing well and assess whether some rotation is in order. We want to keep only those sled dogs that are running or getting ready to run. If the market sells off, I’d be looking to buy back into technology, and maybe banks. Good Investing!

The post May 2017 Weekly Stock Picks first appeared on MarchéEconomics.

April 2017 Base Stock Performance

Weekly stock picks for April outperformed all 3 major stock indices by a wide margin. Those with dividends exhibited a greater return than simple appreciation (or depreciation) suggests. This is especially important for those with minor decreases in value but that paid substantial dividends. The following chart illustrates the Weekly Stock Pick Performance in terms of only capital appreciation or depreciation.

April 2017 Weekly Stock Picks Performance

The post April 2017 Stock Pick Perfomance first appeared on MarchéEconomics.