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Rate hikes typically come when the market is trending up, and investors tend to expect these trends to continue—so they do, for a while. So whether the Fed hikes rates this month, next month or months later, don’t be afraid. Remember that the first rate hike, on average, comes in an environment that is beneficial to investors, and thus you should make the most of it.

Everyone knows Warren Buffett. As the dean of value investing in the U.S, the Chairman and CEO of Berkshire Hathaway (BRK-B) draws thousands of people to his annual meetings in Omaha. As the world’s greatest investor, Warren Buffett seemingly has it all. But there’s one major advantage you have over the Oracle of Omaha.

Most growth stocks are still on their launching pads, which I think is a good thing, at least for now—if the market strengthens from here, my guess is we’ll see some rotation into exciting new growth ideas. That said, I’m also seeing many “follow-on” opportunities in growth stocks—names that soared to new price highs in recent weeks (often following a great earnings report) and have since traded very tightly on light volume … a constructive sign that higher prices are ahead.

This week’s update includes our comments on earnings from Baker Hughes (BKR) and Mattel (MAT) as well as commentary on several stocks.

As of 10 a.m. ET this morning, the market is solidly green, with a broad advance taking both the Dow (up 386 points) and Nasdaq (up 192 points) nicely higher.

The action in the second half of August was encouraging, but as has been the story of 2021, a lot of that move has been erased so far in September—and that goes for just about everything.

Small caps have pulled back ever so slightly from the all-time highs of last week. But that’s not the big news of the week. The larger event was yesterday’s Fed meeting, during which Chairman Jerome Powell suggested that a start to tapering of asset purchases was still a “ways off” but that this was a “talking about talking about meeting.”

Small caps and growth stocks continue to look better for the third consecutive week. This is a welcome trend given that the beginning of May was pretty tough.

The market continues to grind higher and the small cap index, which we haven’t talked about in forever, is finally opening up some white space above its pre-pandemic high. In fact, the S&P 600 Small Cap Index is, at this very moment, trading at an all-time high.

Despite an ugly day for the market on Wednesday, the buyers again bought the dip, and as of the close Friday, the S&P 500 is now approximately 1% from all-time highs. For the week, the S&P 500 gained 0.57%, and the Dow and Nasdaq rallied approximately 0.2%.

Despite an ugly day for the market on Wednesday, the buyers again bought the dip, and as of the close Friday, the S&P 500 is now approximately 1% from all-time highs. For the week, the S&P 500 gained 0.57%, and the Dow and Nasdaq rallied approximately 0.2%.

There have been a number of conferences going on lately, so today’s update is partially focused on what our attending companies had to say.

There were no really big reveals, but also no change in tone from the management teams I listened to – and certainly nothing edging toward the more negative side of the scale.

Big picture, I’d say leadership teams continue to be somewhat conservative. Given that we only have a couple weeks left of Q3 they should have a pretty good handle on how the quarter should shake out (and the year for that matter).

If you’ve ever been tempted by the stories and claims about day trading – don’t be. Here’s why day trading isn’t something that we recommend at Cabot.

Remain bullish, but be a bit choosy on the buy side. The market has had a good run but the normal January crosscurrents are pushing around some of last year’s winners. The portfolio now has 10 stocks and a cash position near 16%.

The yield on the 10-year Treasury rose over 3.1% last week following several strong economic releases and a handful of speeches by current and incoming Fed members. That’s kept utilities and other high-yield investments depressed for another week. Most of our holdings are looking constructive and a few potentially on the cusp of big breakouts.

Remain bullish, but keep your eyes open. The overall market looks fine, but remains extended to the upside, which makes finding lower-risk entry points more difficult. We continue to advise holding your uptrending stocks to give them a chance to turn into bigger winners.

Global markets were all mixed up this week as old world-type stocks moved higher and new world stocks—mostly tech—sold off. Things have normalized a little over the past two sessions however as investors appear to have come to their senses and realized that, while tech might have moved too far too fast, many high-flying technology stocks are doing so well because they’ve been growing at high rates, quarter after quarter, and they look like they’ll continue to do so.

REITs have strengthened since our last update, despite the near-certainty that the Fed will hike rates next month. The strongest performers include residential, data center and storage REITs, and a select group of retail REITs. Utilities, industrials and health care stocks have also had a good week, while financials and materials stocks have stumbled.

Our stocks will start to report the week after next. And with nothing looking totally overstretched or completely beat up (though a few positions bruised), we’re holding the line today.

We have the ideal environment for the relative performance of dividend stocks. You are in the right place at the right time. The portfolio has had another good week and one rating change moving a position back to Hold.