A 10-year Treasury bond pays just 1.4%. A three-year CD pays less than 1%. A 20-year AAA-rated municipal bond pays 1.20%. After taxes and inflation, you don’t even break even. And that’s not to mention the fact that bond prices can plummet if interest rates rise.
The only game in town is dividends. You can still generate high rates from well-chosen dividend stocks and other income-paying securities. It’s nerve-racking to have so many of your investment dollars in the stock market, but with bonds so low paying and treacherous, there is little choice if you need to generate income.
In this issue I highlight an ETF that strikes a more conservative cord than most dividend stocks. It employs a time-tested strategy that has proven to earn consistent high income while generating capital appreciation at the same time. It also pays dividend on a monthly basis and should thrive when the environment normalizes on the other side of the pandemic recovery.
For more great picks and information about navigating the current environment please join me for the 9th Annual Smarter Investing, Greater Profits Online Conference, August 17-19. We have an incredible lineup of experts ready to share their best picks.
This Friday marks the expiration of July options, and if everything holds steady, our calls in MRO, GPRO and SGMS will expire worthless. As a result, we will maximize the call premium on each position. Per usual, on Monday I plan to sell my shares in each position and start the search for more opportunities.
The news-driven environment featuring incessant rotation and crosscurrents remains in effect; throw in the fact that breadth is narrow (about half of stocks are still below their 50-day lines despite the S&P 500 and Nasdaq being near new high ground; broad market indexes are chopping sideways) and earnings season is approaching and we think it’s best to continue going slow and aim to buy on weakness. That said, there are a growing number of good-looking growth stocks out there—not a ton are kiting higher, but there are lots of setups and, while there have been bumps in the road, the sellers really haven’t been able to sink their teeth into them despite some recent strength. All in all, we’re more optimistic than not, but stock selection and solid entry points are key.
This week’s list has a variety of sectors represented, including a few that have avoided the market’s volatility. Our Top Pick is Arista Networks (ANET), whose stock is in a smooth uptrend as growth picks up steam.
The bull market remains intact, so I continue to recommend that you be heavily invested in stocks that help achieve your investing goals.
Today’s featured stock is a consumer stock with a classic cookie-cutter story, which brings the possibility of extended long-term growth.
As for the current portfolio, to keep it at our maximum level of 20 stocks, we’re parting company with long-time holding Huazhu Group (HTHT), for a variety of reasons.
Markets struggled for direction this week as data coming in is mixed and growth and inflation battle for a “goldilocks” middle ground. The controversy over DiDi’s recent IPO has Chinese-listed U.S. stocks in the crosshairs of both China’s regulators and American legislators. Looking ahead, these summer doldrums may just be a precursor to the market continuing its bull run and a bit of a pullback totally in line with the sharp upward swing we have experienced since March 2020. Today we have a pink sheet blue chip clean tech idea of the highest quality.
Here is your July Wall Street’s Best Digest, Mid-Year Top Picks Update issue 843.
Welcome to our Mid-Year Top Picks Update! While the markets in 2021 have continued to drive higher, so have our Top Picks. Our picks averaged a return of 37.5% so far this year, and our Top 5 gained an average of 242.5%!
Those are some great numbers! And as the markets continue to move higher, so does the economy continue to gain strength.
Job seekers are beginning to come back into the market after months of receiving temporarily increased unemployment benefits; that made the unemployment rate for June edge up to 5.9%. Housing sales continue to rise, as does manufacturing. That’s all great news!
In this month’s issue, we highlight updates on many of our Top Picks from our January issue. We begin with Growth stocks, and here we offer updates on the electric vehicle and travel sectors. In Growth & Income, our updates include a retail pharmacy, a jewelry company, a business that markets cell phone towers, and a tobacco stock.
In Financials, you’ll find several banks that pay nice dividends. Our healthcare offerings are four biotech companies. And in Technology, we profile a search and a software stock.
Our Resources and Energy stocks include gold mining, uranium, and lithium companies. And our Low-Priced stock operates in the therapeutic arena. Our remaining Top Picks updates are several funds that offer exposure to the AI, marijuana, cybersecurity, and income sectors.
In addition to our Top Picks updates, I’ve also included a section of new ideas, beginning with apparel, conglomerate, and gaming companies in the Growth genre. In Growth & Income, you’ll find a railroad company as well as a business that sells ID solutions.
Our Healthcare offerings are an HMO, a life sciences company, a biotech, a REIT, and a healthcare tech business. In Resources, we highlight a gold and a lithium stock. And in Funds & ETFs, our contributors profile a real estate and a genomics company.
I hope you are having a wonderful summer. For me, I’m dipping my toes back into travel, taking a few mini trips. And I’m preparing for our Cabot Smarter Investing, Greater Profits Online Conference, to be held August 17-19, 2021. I hope you will join us. As always, please don’t hesitate to email me with your feedback and questions. My address is nancy@financialfreedom.com.
There’s no doubt it has been an incredible year for the market. The S&P 500 has witnessed five straight months of gains while simultaneously carving out new all-time highs in the process. And last week was no different. The market continued to forge higher, with all three major market benchmarks closing the week near or at all-time highs. The S&P 500 added 1.67%, the Dow gained 1.02%, and the Nasdaq advanced by 1.94%.
Thank you for subscribing to the Cabot Undervalued Stocks Advisor. We hope you enjoy reading the July 2021 issue.
The main supports for the market (an improving economy, strengthening earnings, low interest rates and a lack of major negative surprises) remain in place. It looks like a road of green lights well into the future.
One green light has turned yellow, however, with China’s crackdown on Didi Global, owner of the country’s dominant ride-hailing app. We don’t see imminent risk for value-oriented companies, but the long-term risk is rising.
Earnings season starts next week. Earnings reports are often the primary driver of the shares of our undervalued companies. We look forward to seeing how the business fundamentals are improving and listening to managements’ commentaries and outlooks.
I’d like to invite you to our 9th Annual Cabot Investor Conference, held online again this year, on August 17-19, that’s Tuesday – Thursday. You can see presentations by all of our analysts, which will include updates on their areas of expertise and discussions of their best picks.
Please feel free to send me your questions and comments. This newsletter is written for you and the best way to get more out of the letter is to let me know what you are looking for.
I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.
Electric Delivery The first half of 2021 ended up being a needed retracement of the first leg of the new bull market that started in March 2020. The bear move from February to mid-May pushed the Greentech sector into a loss for the six months, anywhere from 1% to 10% depending on your benchmark. Yet we’re still in a long-term uptrend and investors continue to pour money into Greentech: the three largest environmental stock funds saw inflows equal to 33% of their assets under management this year, through June, easily the best six-months ever for Greentech investor inflows.
In this issue of SX Greentech Advisor, we present two businesses, one a recently public prime-mover in utility-scale energy storage and analytics; the other a long-time auto parts supplier that sees big growth ahead in the redesign of electrical systems for EVs. Also inside, our recurring look at the top three technically strong ESG stocks, our Greentech Timer, and a review of our portfolios.
“It is undoubtedly the greatest economic opportunity of our lifetime. The winning companies won’t be worth billions or tens of billions. They’ll be worth hundreds of billions or trillions if we can pull off that goal.” Ben Kortlang, founding partner of venture capital firm G2 Investors, on the U.S. carbon reduction goal of 50% cut by 2030.
Things could actually be turning optimistic for the market and it’s looking like this could be more than just a bounce back from the overdone December lows. There is still risk out there. But a catalyst may be emerging for strong upside with increasing optimism for a U.S./China trade deal. My market prognosis is changing from pessimistic to good with a chance of great.
U.S. stocks delivered great performance in January and are now taking a breather. As such, I expect the S&P 500 index to trade between 2625 and 2825 for a while. The trading range might end up being a little higher or a little lower, but for now, a repetition of the trading range that took place between late October through early December seems most likely to occur. I anticipate that the market indexes will continue advancing later this year.
The market continues to look good as stocks are grinding higher with a few normal-looking down days mixed in (like yesterday) to keep investors honest. Average in, spread out your buys across different stocks, and take note of the current trading range and where support, and overhead resistance, appear to be. Action is starting to pick up in our portfolio, with a few companies having reported this week and a number on tap for next week too.
The Financial Times reported this morning that this portfolio stock was in talks, in late December, to possibly be acquired by AIG, Prudential Financial Group or Prudential Financial.
In light of last night’s events in the Middle East, and this morning’s market declines, I wanted to update where we stand with our Cabot Profit Booster positions. The good news, despite today’s wobbles, is that all are working very well!
A few Cabot Options Trader subscribers have asked me about ways to protect gains in their portfolios, so I thought I would write to everyone with a couple of strategies using options to hedge your portfolio.
A subscriber recently asked me if I keep a journal of my trades. Many traders keep journals so they can look back at their trades and evaluate what they did right and what they did wrong.
Our Cabot Top Ten Trader’s market timing system consists of two parts—one based on the action of three select, growth-oriented market indexes, and the other based on the action of the fast-moving stocks Cabot Top Ten features.
Current Market Outlook