Day 119: Stay Invested
The Mother's Little Helper portfolio was up +1.15% today for a gain of +$7,883.30. Overall gain to date: +$107,010.98 (+18.33%). According to CNN Money the S&P 500 is up +6.04% Year To Date (http://money.cnn.com/data/markets/sandp/).
Tomorrow we'll have earnings from several portfolio companies, Caterpillar, Logitech and Pacific Premier Bancorp.
Today was one of those days where you were happy to have stayed invested. I have been most impressed by the increasing earnings and excellent forward outlook coming from industrial companies like Illinois Tool Works, Snap-On tools, Honeywell, CSX, Caterpillar and others.
Anyone who listened to the noise and sold off on the advice of the doomsdayer's lost a lot of money today. While it was predictable that the French election was going to weight on the markets last week, the 200+ point rally in the DOW was not expected. A little rally yes, 200+ points was a lot, so let's anticipate some profit taking in the near future which will cause the markets to pull back a little. That will be good and healthy and will bring in some more new money. In fact I would encourage anyone with significant profits now to take a little bit off the table and begin building a cash position in preparation for buying opportunities. Don't sell out of good companies, just trim back a little and hold some cash.
Keep in mind that even though the market has a 17.5 multiple, that's considered fully valued right now, there is a lot of money still on the side lines wondering if now is the right time to invest. While most of the stalled dollars are in the hands of retail investors who will invest at the very top of the market. There is also a lot of professional money sitting in cash, waiting for a full correction. So while it would be nice to see all that cash flowing into the markets keep in mind that it will, right at the time when you think everything is going to hell. Right at the moment when you think that all your investments are going to zero is about the time when the professional money, hedge funds and institutional money managers will start buying up bargains. Please don't be the seller of bargains. Be ready with a little extra cash and be one of the buyers.
Stay Invested,
Clay Baker
Disclosure: I am personally invested long in these stocks that appear in the MLH portfolio and may purchase or sell share withing the next 72 hours. I am also invested in other stocks that do not appear in the MLH portfolio: BA, BRK.B, CELG, CSCO, CTXS, CVX, DOW, DVAX, FB, IBM, NTES, NVDA, OMER, PFE, PG, RDHL, SCHW, THO, TWX, VEEV, VZ, XLNX, XOM
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
This article is not intended to offer investing advice, guarantee 100% accurate predictions, or to be interpreted as providing a personal recommendation.
