- MCIM Market Values Feel Impact of Higher Interest Rates and Lower Income Taxes
- Tax Free Income CEF Yields Move Higher as Prices Move Lower
- MCIM Profit Taking Activity Rebounds...
- Bargain Stocks Gone; Equity CEFs Become a "Double Dip" Alternative to Money Market
When equity prices "bubble", many investors sell their safer positions to jump into stocks at "ATH" prices... when bubbles burst, safer securities 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, and even equity Sector ETFs; 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 22.6% ahead of the S & P 500 over the past 9 years. (see the Peak-Trough-Peak Chart); 105% ahead thus far in 2016.
TWO: The IGVS Bargain Monitor fell sharply in November, ostensibly in celebration of the Republican victory. November's closing S & P was the highest number ever!
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: turned back into positive territory early in November
FOUR: IGVSI New Highs vs. New Lows: turned back into positive territory early in November
Negatives: None major, because MCIM portfolios thrive on volatility in both equities and income CEFs
Positives: Recent strength in IGVSI issues relative to the market as a whole; higher income availability in both equity and income CEFs
Long Term... only the shadow knows. But the market is clearly optimistic about the election results. Time will tell if recent negative trends in jobs, the economy, trade, and the general business environment can be reversed.
Income CEFs prices are now up just 4% in 2016 (tax free funds are negative): yields remain above 6.0% tax free, and average above 8.0% taxable. Working Capital and "base income" growth has been helped by strong 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" has found a new to replace the zero yield onf Money Funds/Bank Deposits ; equity CEFs are being used to offset shrinking individual opportunities... and to generate excellent income.
Monthly Statement Prognosis: Most "income" portfolio values have fallen, while 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 always proven to true.
For more information, call 800-245-0494 or e-mail Steve (sanserveataoldotcom).