Global Market Insights and Investment Advice
I issue periodic letters with market insights, analysis of stock groups, credit markets and current market conditions. You may want to bookmark this page so you can come back and check for the latest updates.
Fall / Winter 2009 Market Outlook.
Suffice it to say, the global equity markets have had a big run off of their March lows. Just one example is our S&P 500 Index, which bottomed at 667 on March 9 of this year, and is now sitting at 1064. (It peaked at 1576 in early October of 2007.)
Most of us have several complaints about the way the financial system has been “saved,” and we have real concerns about the future of our economy, but it is clear that the financial system has been rescued from the brink and is mostly functioning well, and economic activity is picking up, for now anyway.
For most of us safety is still the most important investment issue. So what strategies seem relatively less volatile yet still provide an opportunity for returns? Here’s what I think we should stay focused on as investors:
- Income
- Short term (under 3 years) debt (bonds, ETFs, laddered CDs.) Inflation may be coming, so long term debt may be vulnerable.
- Income
- Dividend paying common stocks (3%+ yielders) of high quality companies. Favorite sectors include healthcare, consumer staples and integrated energy companies.
- Income
- Covered call writing. This is a conservative strategy that can really add yield to stock positions and lower cost bases.
- Income
- Publically traded energy master limited partnerships. Require extra tax reporting in taxable accounts, but dividend yields are often significantly higher than most stocks.
From a technical standpoint many sectors of the stock market are especially strong right now, including; tech, biotech energy, metals, energy and emerging markets. Now, I’d be more interested in these sectors on a market pullback. Please call me for a deeper discussion here.
Bob
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