Home Forums Hunting & Shooting Hunter's Campfire Don't look now but stock market is booming

OrangeOkie, thank you very much for the video. I enjoyed it very much seeing a different perspective. It confirmed some things I've thought about with this current market.

Market Commentary - May 29, 2019

by Rida Morwa - High Dividend Opportunities

The renewed market turbulence is the result of deepening concerns about the fallout from the collapse in trade talks between the Trump administration and China. Investors fear that tariffs — and China's retaliation — will badly slow the global economy and ding corporate profits. President Trump said on Monday the U.S. was “not ready” to make a deal with China, before adding he expected one in the future. The president also said tariffs on Chinese imports could go up “substantially.”

As a result, traders have rushed to the safety of government bond yields, sending 10-year Treasury bond yields plunging to the lowest levels since late 2017. It is worth to note that the yield curve - which is the gap between short-term and long-term bond yields - has once again inverted.

The recent decline has wiped about 6% of the S&P 500 since it closed at record highs in late April.

The Technical Situation
The Markets has recently been bouncing around this trend-line. However, the fact that the bulls have not been able to hold on to gains is somehow concerning for the short term outlook. So far, the S&P 500 index has managed to close the sessions above the 2800 level which is a major support level. However if we close below this level, we could see accelerated selling that could accelerate.

However, we should also note that technically speaking, there is a lot of support underneath, which could limit further market declines.

Is the pullback justified?

Despite increased volatility, the markets continue to perform well. The S&P 500 Index is up over 12% year to date. Bonds are up 3.5%.

While the short-term picture does not look good, I remain confident that the current pullback is not concerning. The hike in tariffs is only a one time event that will not recur and that it set to adjust itself relatively quickly. Global trade is very dynamic and should adjust in a relatively short period of time. The price hikes resulting from tariffs should reverse themselves as the supply chain gets shifted away from China. In fact, the higher tariffs should be deflationary as time goes by, and help boost the economy.

We should also note that economic conditions in the United States remain strong despite the higher tariffs. Most notably, the United States added 263,000 jobs in April, lowering the unemployment rate to a 49-year low of 3.6% and consumer confidence remains high. Clearly, the trade war has not impacted the economic growth and employment in the United States.

Another point to note is that trading activity has been relatively thin lately, so the recent declines have been the result of smaller activity based on low volumes. Money flows into US stocks have been negative year to date, suggesting that there is less investor speculation or hot money that is piled into stocks. Therefore, any further pullback, if we see one is likely to be limited because there are not many investors that are willing to sell their position.

Treasury Yields keep coming down
Another indicator that the markets remain healthy is declining interest rates of U.S. Treasuries. This suggests that there is high confidence in the credit conditions of the bond market, and that risks of inflation remains low. Lower interest rates is off course bullish for equities in general as it results in lower borrowing costs and help boost profits. Also lower interest rates is very bullish for high dividend stocks, preferred stocks and baby bonds, as demand for high yield is set to increase when interest rates continue to decline.

What Comes Next
While the short-term outlook for equities is uncertain, the medium and long term outlook is positive in my opinion. What we are seeing today is a normal pullback following big gains, and it is set to be followed by a consolidation period before the uptrend resumes. I am still confident that a large market correction or a "bear market" is unlikely to happen. Economic conditions are today better than they were a few months ago due to coordinated efforts by Central Bankers across the globe to rekindle the economy by accelerating quantitative easing. This has pushed back recession risks for at least the year 2021 or 2022. In the meantime, this bull market is set to continue.

Best Course of Action for our Members
While it is possible that we will see further volatility and some down days due to the economic fighting between the world’s two largest economic powers, the long term bull market remains in place. At High Dividend Opportunities, we have shifted our portfolio to a more defensive one with a 40% allocation to fixed income, including preferred stocks, bonds, baby bonds, and fixed income CEFs. This move has resulted in a lower overall volatility for our portfolio, and I recommend that members who have not reached our recommended allocations to do so the soonest possible. For more information on our recommended allocation, please refer to our last portfolio update. Here is the link:
Monthly Portfolio Update May 19, 2019

Our portfolio has heavily focused on stock and bonds with exposure to the United States, and very little exposure to international stocks. Clearly, the United States remains the best market in which to be invested.

Our best recommendation for our members is as follows:

If you are fully invested, we recommend to remain so and continue to collect the high income that our portfolio provides. This pullback should not last very long.

If you are sitting on dry powder, I recommend to start taking a full position in our conservative picks (the ones that are tagged as "must owns"), and to take a full position in the recommended preferred stocks and bonds. For the other recommendations, it is best to build a position slowly and take advantage of any further pullback if we see one. The greatest opportunities come at times like this.

Don't try to time equities. That's a fools errand.

I gained and lost 6 figures since fall. I am up 12.5% since december, but net loss of a tiny bit for 90 days. Really I have about the same as last September. I have 2/3 in SP100, rest moderate growth. Anyway losing and gaining that much is a trip, but I can't touch it yet anyway due to my age. My guess based on shear gut stupidity, is that near the 2020 election it will dive due to uncertainty, then once President Trump wins, it will climb. So 2021 should be good. Who knows, disaster, war, Trumps strokes out, and it could all change. Hope to retire early in 2021. I can milk the 1/3 in moderate growth fund if the stock is at a low, and even 4 years of emergency liquid cash. I'll still have shares and dividends when/and if the stock tanks. At that point I can wait out a new boom. Generally there is a 10-15 year growth recession cycle, I can wait out the cycle with a balanced portfolio. Right now still in growth, but recession has always ensued, maybe due to fed policy. Super worse case is EBT card like the bottom feeders, or even just work.

I do hope that we don't recess between now and 2020.

Indeed.

That seems to be in play. Maybe to dick President Trump if your are cynical. Anyway the recession growth cycle is pretty consistent across time, and looks like a sine wave. Right now it looks kinda like a peak, and down in the natural next step. I hope that is not true, and no one knows, but it looks like the whole world economy is against me fishing a lot in a couple years. That is my personal murphys law. Sell high, buy low I guess, and have some cash to wait out the storm. F that storm. Good luck guys.

Economic conditions are today better than they were a few months ago due to coordinated efforts by Central Bankers across the globe to rekindle the economy by accelerating quantitative easing. This has pushed back recession risks for at least the year 2021 or 2022. In the meantime, this bull market is set to continue.

So I take that to mean the “bullish market” is artificially bullish because “quantitative easing” means printing money and injecting paper to prop up the market. That sounds like a <major> correction waiting to happen.

There are many ,many ships at the bottom of the sea & Great Lakes......with their Wheelhouse fulla charts.

Income, Dividend Growth Or Capital Gains? Where To Invest For The Next Three Years

Aug. 10, 2019 2:19 PM ET

Rida Morwa - High Dividend Opportunities



Dear HDO Members,

I would like to welcome all the new members who have joined us recently.

Latest Top Buy List and Portfolio Holdings

As a reminder, our "Model Portfolio" tables were last updated and posted to HDO members on July 1, 2019. The following is the link:

Monthly Portfolio Update July 1, 2019

Our Model Portfolio can be directly accessed via "Google Sheets" as follows:

To access the HDO Model Portfolio CLICK HERE.
To access the HDO Preferred Stocks CLICK HERE.
To access the HDO Recommended Bonds, CLICK HERE.

Note that all three portfolios are now in the same Google Sheet entitled HDO Model Portfolio, but show under different tabs as follows.



New members can start building positions in stocks marked as Must-Own and Top-Buy, while taking into account the corresponding "BUY UNDER" Price and RISK LEVEL provided next to each security. Members should also take into account the allocation recommendations.

Please note that the Model Portfolio is updated in "real time" to include all new "Buy Alerts" and "Sell Alerts." The prices of all securities are updated "Live" (with a 20 minutes delay.)

Income, Dividend Growth Or Capital Gains? Where To Invest for the Next Three Years

Summary

- The year is just over half finished.
- Market volatility has rapidly increased.
- The worst months for market performance historically are still coming.

At High Dividend Opportunities we like to keep life simple. We focus on recession resilient, aka life proof, high yielding immediate income opportunities. One's that you can buy, put on a shelf and let the income roll in. The year is just over half over and the market has seen increased volatility. Investors may be led to believe that the safe havens of the S&P 500 index would be the best place to lock in better returns - from Jan through May. This hasn't turned out to be true.



The question is worth asking again, invest in high yield opportunities or growth/total return? Historically, many high yielding sectors have been out of favor but recently their out-performance is becoming apparent. This could be the result of investors flocking to higher yielding options, or that among those higher yielding options, the weakest and poorly performing options have died out.

Sell In May and Go Away! - Not So Fast

There is an age old adage that says investors should sell out of their investments at the end of April and return in November. Why? 3 of the most commonly worst performing months in the market are during this period - May and September - while four of the best are in the remainder of the year. October while overall positive, is notorious for exceptional volatility and has been home to the 1929 and 1987 crashes and a horrendous decline in 2008.



Understandably, investors not focused on dividends or income have the right to be stressed throughout the May through September/October window and this current year is no exception. May alone knocked 5.67% and 6.03% off of the S&P 500 and Dow Jones alone, from May till current, their returns have been under 2% positive.



I'm not encouraging investors to flee the market. I personally am remaining fully invested. The key difference? Turbulent months provide additional buying opportunities for those investors who price alone is not the goal. Investors who focus heavily or even 50% of their return goals on price appreciation often struggle during May through October the most with fears over losing their money.



Even the seemingly impossible to best FAANG - Facebook (FB), Amazon (AMZN), Apple (OTC:APPL), Netflix (NFLX) and Google (GOOG), (GOOGL) - or ever resistant Tesla (TSLA) have struggled to post positive numbers since April. Without the bulwark of providing dividends (APPL excluded since it does) investors in these stocks have nothing to offset their recent price declines.

We Focus on a Different Metric - Income Safety

The difference between investors who look to capital appreciation and the average income investor isn't always apparent. We want to make money too! The difference is in how. We don't gamble on price movements, but focus on strong high yielding investments. Investors who bought Eagle Point Credit (ECC) in December are laughing every month when their account receives distributions for 17.7% on their cost basis. How could they have their enormous yield? By buying the facts - not the sentiment.

By focusing on building a strong and reliable income stream, High Dividend Opportunities ' members and other income investors have less stress during the bad months and enjoy their dividends to live off of, or even better, reinvest in the market.

Human nature is to buy high and sell low. At HDO we buy high yields and sell when their thesis is fulfilled or the need for portfolio rotation becomes apparent.

What About My "Safe" DGI Ideas?

Dividend growth investors often believe their low yield, growing dividends are the penultimate source of potential success, often as the dividend is increased, the share price moves along with it. This means many DGI are also focused on total return, they expect the low yields and steady price growth to benefit them on both ends. These investors also often suffer more emotional pain when prices drop rapidly since they are not receiving enough income to withstand a sudden price drop.

Also income investors should keep in mind that the vast majority of "dividend growth stocks" carry very lofty valuations because of their expected growth. When the economy slows down, their future growth is set to slow down, making these high valuations unjustified. Therefore "dividend growth stocks" are more risky to hold during periods of economic weakness or in a recession.

Imagine if your $100 income stream was growing by 5% annually, or you could have $200 without growth. Then imagine if the share prices dropped 50% during that time. Psychologically, the higher yielding option is easier to maintain. Ironically, higher yielding options are also psychologically deemed to be of a higher risk - so price fluctuations are actually more expected.

While DGI choices will become cheaper and offer higher yields in the short term, over a long term time frame, high yielding options provide more income and faster reinvestment versus other investment types.

Two Quick Buying Ideas For Your Portfolio

When share prices go crazy, look for deals on these two securities as a means to secure stable income in a declining interest rate environment.

- RLJ Lodging Trust CUM CONV PFD A (RLJ.PA) is a special high yield preferred, currently it yields 7.3%. It is unable to be called, and only can be converted if RLJ's common share price rises to a much higher valuation. Typically, when common equity values drop, preferreds rise in an inverse relationship. This past December, we saw the entire market seeing irrational selling. This stock should be on your buy list in an event of a market wide sell off - it will keep paying you.

- Capital Management (NLY) which yields 10.6% is another security to put on your recession buy list. Why? As we've mentioned previously, NLY historically outperforms when the market is under-performing. This inverse relationship has caused it to sour on many investors with short memories during this historically long bull market. Many investors saw NLY perform strongly - as it always has - during a recession and bought it high, only to suffer during this recent bull market with dividend cuts and declining value. We get it. We're not perfect either, but the time to buy NLY is now, before a recession kicks in and its performance once again sets investors hearts aflame.

Key Takeaways

Dividend Growth Investors and those who focus on price appreciation with no dividends are subject to additional fear, worry and stress. Immediate income provides emotional and psychological support - short term pricing pressure allows for additional re-investment. The summer and autumn months historically offers the most volatility and worst market performance over the past 90 years. This is the time income investors grow their income stream the fastest with high quality choices on sale. With the Federal Reserve set to continue to cut interest rates over the next two to three years, High Dividend Stocks remain the best place to be. Income investors are set to be very well rewarded with high yields of +9% plus good potential for capital gains.

What should you focus on? Immediate income. When? Now.

Is the Fed losing control?

https://www.unz.com/proberts/is-the-federal-reserve-losing-control-of-the-gold-price/

After years of being kept in the doldrums by orchestrated short selling described on this website by Roberts and Kranzler, gold has lately moved up sharply reaching $1,510 this morning. The gold price has continued to rise despite the continuing practice of dumping large volumes of naked contracts in the futures market. The gold price is driven down but quickly recovers and moves on up. I haven’t an explanation at this time for the new force that is more powerful than the short-selling that has been used to control the price of gold.

Various central banks have been converting their dollar reserves into gold, which reduces the demand for dollars and increases the demand for gold. Existing stocks of gold available to fill orders are being drawn down, and new mining output is not keeping pace with the rise in demand. Perhaps this is the explanation for the rise in the price of gold.

The Fed controls everything, that ain't gonna change.

I thought it was Soros and the Rothschilds?

This booming market will collapse when they want it to.,,period.

Soros is a fat old punk with no power, a foot soldier.

I am over 50% into AMZN right now and have been for many years.


My only question is, "Why couldn't Jeff keep it in his pants?"

Market Update: What Is Happening With The Markets Today?
Aug. 23, 2019 1:26 PM ET



Dear HDO Members,

This is a market commentary.
It is a pretty ugly day today. Investor sentiment today is at its worst following trade escalations between China and the United States. Today China announced a new round of tariffs against the U.S., and president Trump retaliated by ordering U.S. companies to start immediately looking for alternatives to exporting to China.

As far as the technical picture, it looks like we are still holding the trading range. The S&P 500 index is currently testing its 200-day moving average which is currently at the 2850 level. Should we break below, we could go down to the 2750 level, which is another support level. But that would put the bears in control for the time being.

Why I am Optimistic
My personal opinion is that we are likely close to a bottom. As far as the trade war is concerned, usually things do not get better unless they get much worse, and both side seem to be escalating to the maximum. This looks to me like we may find some sort of truce soon and likely a final resolution. Both sides have used most of the pressure points they have and there is really nothing meaningful left as far as the pressure arsenal is concerned.

Furthermore, Fed Chairman Mr. Powell just hinted that we are likely to get a 2nd rate cut in September. Remembers that I was predicting two to three rate cuts from the Fed in 2019 and we are likely to see three of them. Of course, this is very bullish for high dividend stocks, especially the ones that we currently own in our portfolio. Most of our positions that we have switched into recently are recession resilient and great ones to keep holding in both good and bad times.

So a trade resolution along with lower interest rates in the United States and globally is a great plus. As interest rates go down, corporate profits go up . Importantly stock valuations become less expensive as the dividend yields become more attractive compared to Treasury yields. One of the best indicator of stock valuations is the differential between the dividend yield of the S&P 500 index relative to the 10-year treasury yield; By using this metric, stock valuations are at their lowest in years. Another important factor to keep in mind is that the United States economy has had so far a very little impact from the trade war, and most economic data being reported has beaten estimates. So the macro picture looks well and constructive for the stock markets.

It is always been to keep a bird's eye view when investing. It is the economy that determines the direction of the stock markets and not the other way around.

Why I am sleeping Well at Night
This is one of the best days to be invested in dividend stocks, preferred stocks and bonds. Most preferred stocks and bonds are holding out pretty well despite the market's sharp pullback. This is the reason why we are currently recommending that our members invest at least 40% of their portfolio in fixed income, which includes preferred stocks, bonds, baby bonds and high-quality fixed income CEFs. They tend to result in much lower price volatility for the portfolio in addition to a safe and stable income.

Even better, our portfolio's income is resilient to economic downturns, and no matter what happens, our portfolio is set to generate a strong high level of income.

The bottom line is that I believe that the current turbulence is temporary, and we are set to see the markets gain ground relatively soon. We have a high degree of confidence in our recommendations. When investor sentiment is at worse, it is one of the best time to start buying. So if you have some dry powder, it is a good time to start using it.

I am personally fully invested in our HDO picks, and have little cash left to add new positions. I am happy with our entry points that we have recommended, and we are set to continue to outperform over the medium and long term. This is a market that will reward long term investors. The best course of action is to sit tight, not panic and keep collecting our high dividends.

Good investing,

Rida MORWA

2yr and 10yr just had a yield inversion a couple of days ago. I figure 1-2yrs left, maybe sooner depending on China and Europe.