Despite the weakness today, July is off to an excellent start, with all of the models rising in value rather sharply and exceeding their benchmarks:
Top 20 rose 2.59% in the first 8 days of the month, well ahead of the S&P 500, which has increased by 1.83%. While we had our first negative pre-announcement today (a RIMM supplier), most of our stocks have started the month quite well, with several up over 5%. Earnings season will kick in beginning 7/20 for our names. Top 20 is now ahead of the market for 2011 again. You may recall that after a huge finish to 2010, we started the year sluggishly but surged into the end of April. May was very challenging and led to a tough Q2, but we beat the market in June and are off to a good start early this month.
Conservative Growth/Balanced extended its consistently strong performance, rising 1.72% so far this month, about 0.4% better than the blend of stocks and bonds. The model is 3% ahead of the market so far this year. All but one of our stocks are up so far this month. We continue to be close to fully invested (our max is 75% stocks), with bonds near their 10% minimum.
Sector Selector ETF launched at the end of April and has struggled with heavy exposure to Financials. Still, the model has essentially tracked the S&P 500 after rallying 1.97% so far this month, about .15% better than the S&P 500. I like the way we are positioned, having made the portfolio a little more aggressive during Q2 by selling out the Utilities and Healthcare. We have a somewhat barbelled portfolio, with exposure to the largest and smallest stocks as well as some exposure to Emerging Markets.
Outlook
While the economic data today was disappointing, I am rapidly becoming more optimistic about economic recovery. I expect to see housing and employment trends improve over the balance of the year. With respect to the market, several components have exceeded their April highs now, notably the NASDAQ 100 (large Growth companies) and Consumer Discretionary (we have a tilt in Sector Selector there). As I look at the charts, things look quite constructive to me, reminiscent of the ways things looked after Labor Day last year. I think that my recent contributions (see below) reinforce my view.
Articles
- S&P 500 Still on Track to 1500 - Seeking Alpha
- 10 Healthcare Dogs - Seeking Alpha
- Housing Stocks- TradeKing
Have a nice weekend!
Alan Brochstein
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