Monthly Stock Market Report – March 31, 2015

A Loss Month…A Ho-Hum Quarter. Buy “Fun Stock” Six Flags (SIX) for Growth and Income (4.3% Yield)

Stock Market ReportThe U. S. stock market for March could best be described as a “yo-yo” market! Unlike a “roller coaster” market with somewhat smoother ups and downs, March was up strong one day and vigorously down the next day. In fact, there were 15 out of 22 trading days where the Dow Jones Index made swings of triple digits. All this action got us nowhere and frustrated the traders as the broad-based S&P 500 lost 1.8% and ended the first quarter up only 0.44%.

However, investors who stayed focused on the better and more fundamentally sound sectors for the first quarter realized solid gains in health care (up 22%), technology (up 14%), and what we define as “consumer-powered sectors” (e.g., cruise lines, up 15%). On the other hand, avoiding energy-related and materials sectors which were down 17% and 19% respectively were smart moves.

Our initial outlook for the second quarter indicates more of the same “yo-yo” effect as corporate earnings are mostly projected to disappoint. The Bull and Bear battle will continue in earnest without any strong trends either way until the U.S. Federal Reserve (Janet Yellin, Chair) tells us how soon and how much interest rates will rise in the coming year.

No Change in TSOA Retirement Allocation Models

Despite the prospects of continued high volatility in the stock markets, we do not see a need to make any changes to our current TSOA asset allocation models for retirement accounts (401k, 403b, IRA’s, etc.).

Buy Six Flags Entertainment Corporation (SIX): Current Yield 4.3%

As we transition from our fixed Fun Stocks Index to a flexible Fun Stocks Portfolio, we will add Six Flags (SIX) to our new portfolio “buy list.” SIX is a theme parks management company that operates 16 theme parks throughout the US (plus one in Canada and one in Mexico). Since 2010, when SIX came out of bankruptcy, it has been given a second life because it has effectively implemented a solid new strategic focus. New rides and attractions coupled with a stronger pricing strategy have resulted in positive trends in sales and earnings.

Rising consumer discretionary spending should help SIX to continue to reap profitable gains. However, if consumer spending drops due to weakness in the U.S. economy, SIX will be adversely affected. Therefore, and despite its attractive 4.3% current yield, investors should view SIX as a high-risk holding that deserves only a small allocation in their portfolios.

Good Investing,

Jim Tso

Please note: Jim Tso owns shares of SIX in his IRA.

Monthly Stock Market Report – February 28, 2015

A Big Rebound but Proceed with Caution; PLUS Our Fun Stocks Index Is Changing A big 5.5% rebound sparked by better-than-expected corporate earnings in the S&P 500 Index in February wiped out its 3.1% loss in January. As such, the S&P 500 is up 2.2% year-to-date. Investors, who maintained their asset allocations in stocks benefited […]

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Monthly Stock Market Report – January 31, 2015

Stock Market Volatility Not for the Faint-Hearted U.S. stock market action during January 2015 was very volatile, with 14 of out 20 trading days resulting in up or down moves of around 1% in the S&P 500 Index. In fact, January 2015 marked the most volatile month in the last 5 years. Investors could not […]

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Forced IRA Rollovers: Are You a Foolish Ex-Employee?

Is your head in the sand?

How many jobs have you had in the last 5, 10, 20 or so years? Did you have a vested 401k or 403b with each job? (A 403b is a retirement account with a non-profit employer.) Did you roll over ALL your 401k/403b accounts from ALL your former employers into a rollover IRA account (or […]

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Monthly Stock Market Report – December 31, 2014

2015 Outlook Positive with Cautions The U.S. stock market action in December 2014 was nothing to write home about. In fact, it was a small month-to-month loss due to usual low-volume stock trading losses just prior to New Year’s Day. While the 2% loss from December’s final days of volatility may not be too scary, […]

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Monthly Stock Market Report – November 30, 2014

November Rallies with a Warning about Energy  5 Reasons to Buy Royal Caribbean (RCL), Carnival Cruise Lines (CCL), Norwegian Cruise Line (NCLH), and Disney (DIS)! The November stock market was most unusual in that 14 of 19 days of trading (or 74%) resulted in gains. As positive U.S. economic data and pledges of continuing stimulus from Europe […]

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Monthly Stock Market Report – October 31, 2014

A Month of Corrections and a Big Rebound. Buy cruise lines! The “bumpiness” we predicted came true when the month of October began with days of scary “downs” followed by days of hopeful rallies. For the month, we experienced a 9.5% correction on October 15th (intraday low of 1,820 on the S&P 500 Index)  followed […]

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Monthly Stock Market Report – September 30, 2014

Some Bumpy Rides Ahead…Buy the Dips  If September’s stock market action (down 1.6%) and the volatility of the first few days of October (down 1.32% on Oct. 1 and up 1.12% on Oct 3) are any indication, the next few months to the end of the year will be a very bumpy ride. Investors can […]

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Monthly Stock Market Report – August 31, 2014

Good Time to Buy Ashford Hospitality Trust (AHT) August turned out to be an important rally-extending month. The U.S. stock market recovered from its July malaise (down 1.05%) and gained 3.89% in August. The market achieved this excellent performance despite the on-again off-again Russian/Ukraine conflict. While the situation in the Ukraine remains a major concern, […]

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