What To Expect During A Market Correction?

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 MCIM Portfolio Values Benefit from Energy Sector & Income CEF Surges
Tax Free Income CEF Yields Fall...Prices Approach 52-week Highs

MCIM Profit Taking Activity Surges; S & P Decline Continues 

Bargain Stock Numbers Remain High; Fewer In Energy Sector

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.

No account statements present proper asset allocation information where there are income CEFs, REITs & MLPs; they also provide grossly inaccurate individual bond prices... call your congressman.

The IGVS Performance Analyzer applies exclusively to Market Cycle Investment Management Programs. It has four elements:

ONE: The IGVSI is dead even with the S & P 500 over the past 8 years. (see the Peak-Trough-Peak Chart); monthly income and realized gains more than offset taxable income CEF price weakness throughout 2015.

TWO: The IGVS Bargain Monitor has been above 100 issue barrier nearly every day, reflecting overall market weakness. Energy issues seem to have stabilized.

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, remain in correction mode.

FOUR: IGVS New Highs vs. New Lows:  totally negative since July 2015.

Negatives: All stats have trended "market negative" since the ATH on May 21st.

Positives: Recent strength in Energy issues and the surge in income CEFs

Long Term... only the shadow knows... we're through eight months of a slow moving correction, down roughly 12% from the latest high; about 1% above the most recent low.

Income CEFs prices are positive thus far in 2016... tax free much more than taxable: yields remain between 5.5% and 6% tax free, and above 7.5%taxable. Working Capital and "base income" continue to grow.

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" levels are shrinking, as buying opportunities are appearing in non-energy issues.

Monthly Statement Prognosis: Most "income" portfolio values will be close to even in January; all 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 what they have always proven to be.

For more information, call 800-245-0494 or e-mail Steve (sanserveataoldotcom).


 
Market Cycle Investment Management
3912 Betsy Kerrison Pkwy
Johns Island, SC 29455
Phone (800) 245-0494 • Fax (843) 243-8509
Contact Steve directly for additional information: 800-245-0494

Please read this disclaimer:
Steve Selengut is registered as an investment adviser representative. His assessments and opinions are purely his own. None of the information presented here should be construed as an endorsement of any business entity; the information is only intended to be educational and thought provoking.


The Working Capital Model - Market Cycle Investment Management - FREE Mentoring Program

Professional Investor/Manager Steve Selengut, and an experienced panel of experts, walk you through the Market Cycle Investment Management (MCIM) portfolio management process. We'll hold your hand, answer your questions, and do everything we can short of security selection as you learn how to run your own (or your client's) portfolio.

The Mentoring Program is FREE, and includes:

  • The "Road To Success" Investment Training Program (minimum of 3 sessions)
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  • The "Market Cycle Investment Management" program

The mentoring program is no longer private --- at least six people (all "Brainwashing" book owners) must attend each meeting.

Note:  Headsets will make the experience much more productive.

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Please read this disclaimer:
Steve Selengut is registered as an investment advisor representative. His assessments and opinions are purely his own and do not represent the views of any other entity. None of his commentary is or should be considered either investment advice or a solicitation of business. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be or should be construed as an endorsement of any entity or organization. The reader should not assume that any strategies, or investments mentioned are any more than illustrations --- they are never recommendations, and others will most certainly disagree with the thoughts presented in the article.