- MCIM Market Values Benefit from Stock Market & Income CEF Surges
- Tax Free Income CEF Yields Fall... Prices At 52-week Highs
- MCIM Profit Taking Activity Expands to incclude recent equity purchases
- Bargain Stock #s Shrink; Profit Taking Opps Expand
When equity prices "bubble", many investors sell their safer positions to jump into stocks at "ATH" prices... when bubbles burst, safer securities start to thrive.
No investor should be surprised by changes in market value on monthly account statements. Media noise throughout the month should prepare you for what's going on.
The future is unpredictable, but developing reasonable portfolio expectations is essential to your long-run investment comfort --- and sanity. The Performance Expectation Analyzer has been developed for MCIM investors who want to better understand their monthly performance numbers.
NOTE: that no account statements present proper asset allocation information where there are income CEFs, REITs & MLPs; they also provide grossly inaccurate individual bond prices.
The IGVS Performance Analyzer applies exclusively to Market Cycle Investment Management Programs. It has four elements:
ONE: The IGVSI is 20% ahead of the S & P 500 over the past 9 years. (see the Peak-Trough-Peak Chart); 236% ahead thus far in 2016.
TWO: The IGVS Bargain Monitor shrunk in June and July, and includes opps in just 15 Sectors; NONE in either energy production or utilities.
NOTE: The information provided here is not predictive of anything. It is most relevant for portfolios with at least 60% invested in Equities. Study The Brainwashing of the American Investor... you'll understand.
THREE: IGVS Issue Breadth Stats: Negative through most of 2015, are now strong, showing significant improvement since March.
FOUR: IGVSI New Highs vs. New Lows: continue positive because of fewer new lows in energy related sectors
Negatives: None, really, for MCIM portfolios, volatility plays into the strengths of our operating strategies.
Positives: Recent strength in Energy issues and the surge in income CEFs
Long Term... only the shadow knows. We're less than a month into the "rally reboot", but with a shrinking total workforce, a slow-growth economy at best, and a presidential election on the horizon, the only certainty in the short run is uncertainty and volatility.
Income CEFs prices are up 15% in 2016: yields remain around 5.5% tax free, and above 7.5% taxable. Working Capital and "base income" growth is helped by increased profit taking activity.
Remember MCIMers: Working Capital and Base Income continue to grow with or without market value gains... is that cool, or what!
YES, even if the stock market plunges, Working Capital & Base Income should continue to grow so long as withdrawals remain lower than income.
Equity "Smart Cash" remains slightly elevated; individual equity buying opps remain scarce.
Monthly Statement Prognosis: Most "income" portfolio values are at new ATHs and all portfolios continue to produce outstanding income.
BIG BUT: Income CEFs will continue to cut payouts so long as the government holds interest rates at historically low levels. Strategically, it's time to make sure you are not spending more than 70% of what you are earning.
SERIOUS NOTE: In all environments, always try to add more to your portfolio than you remove. Also, try to think of lower prices (in income CEFs for example) as opportunities instead of problems... that's always proven to true.
For more information, call 800-245-0494 or e-mail Steve (sanserveataoldotcom).