After several strong weeks, both models paused during this options expiration week. This is all the pre-season, as earnings reports start in earnest next week. Here is how we are looking:
In the Top 20, the S&P 500 pulled back slightly, but we slipped by more. Our lead dropped from 4.59% to 3.53%. We basically reversed out the strong performance last week. It was a tough week for several of our Small-Cap holdings.
Conservative Growth/Balanced slipped very marginally, along with the market, with its lead contracting from 1.95% to 1.75%. The portfolio is actually up MTD despite stocks being down and bonds being up just marginally.
Market Update
We still have a divergence, with larger companies unable to penetrate the peaks from February. Smaller companies were able to do so. Same with Emerging Markets. There has been a substantive shift in leadership lately, with Healthcare coming on strong. Energy seems to have put in at least a short-term top. All in all, I believe that we are still on track for 20% returns in the S&P 500 this year. I had been concerned about some consolidation, but it seems like we are almost past it now. I view this as a nice time to own stocks - good valuations, an improving economy and most likely continued exodus from bonds to stocks ahead.
Articles
- 10 Growth Stocks (TradeKing)
- Healthcare Momentum (Seeking Alpha)
- 12 Healthcare Stocks (Seeking Alpha)
I am considering several new names, but nothing appears imminent, as I remain satisfied with the holdings in both models and our overall portfolio structure. We'll see if there are any changes after my review tomorrow.
Regards,
Alan Brochstein
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