Monthly Stock Market Report – August 31, 2015

A Month of Extreme Volatility; Be Thankful for Stock Market Corrections

Stock Market ReportYes, I know it feels bad. Nobody likes to see their portfolios drop in value, especially at a rapid pace. Unfortunately, that is the nature of the beast – investing has risks, sometimes big risks. And panic selling is not the answer. You could blame China’s slowing economy, the U.S.’s over-valued stocks, Europe’s stagnant growth, the Federal Reserve’s mixed messages on rate hikes, or the moon’s phases (some investors actually do). They all have some effect on the actions of short-term traders who command the daily, weekly, and even monthly volatility. Long-term investors like me (and you?) actually welcome these “corrections,” because we have learned to manage our risks and therefore have cash ready to be deployed to acquire great stocks of great companies at cheaper prices.

If you are employing the sound and proven dollar-cost averaging (DCA) investment techniques, now is the time when you will acquire more shares for the same amount of money invested due to lower prices. This is a key principle of DCA, especially when you use it with regular monthly contributions to your retirement accounts (IRA, 401k, 403b, etc.).

While the S&P 500 Index reached a high of 2135 on May 20 and hit a recent low of 1868 on August 25, and despite some recent rebounds, it is possible that it may correct further to 1820. An S&P 500 Index of 1820 would constitute a 15% correction from the high of 2135. And this level may set the stage for a rally into early 2016. So, don’t panic… View a “correction” of 10- 15% as a great buying opportunity to employ your cash.

Disney (DIS) – A Super Buy

In fact, buy Disney (if possible, under $100/share), which has corrected 21% from its recent high of $126/share due to some concerns about its cable carrier arrangements. Disney’s fundamentals are strong and will be stronger with many new revenue and profit generating sources, including the highly anticipated upcoming films of its Star Wars franchise. I will share more about Disney in future blogs, so register for a free subscription in the green box here to get free alerts when I post future blogs.

Continue with your allocation by applying dollar cost averaging in our TSOA Retirement Allocation Model Portfolios even as the markets continue with their corrections. Stay tuned…

Good investing!

Jim Tso

Monthly Stock Market Report – July 31, 2015

Greeks Relent, So Back to Earnings July’s markets rebounded from the earlier negative effects of the Greek debt crisis . As we predicted, the potential Greek default scenario had only minor impact as the U.S. stock markets (S&P 500 Index) corrected less than 3%. After the Greek government accepted the reality of its situation and […]

Continue reading...

Monthly Stock Market Report – June 30, 2015

A Real “Greek Tragedy” Unfolding Unlike the mythical accounts of personal tragedies as depicted in ancient Greek culture and famous writings by Sophocles and others, a real Greek tragedy is unfolding as recent national events and decisions in Greece are leading that nation into a long-term financial calamity. Creditors have required the current Greek socialist […]

Continue reading...

Monthly Stock Market Report – May 30, 2015

Avoid “Fun” Casino Stocks (WYNN, LVS, MGM) for Now The S&P 500 squeezed out a 1.05% gain in May despite economic data that showed a contraction in the U.S. Gross Domestic Product (GDP) for the 1st quarter of 2015. This gain was due to the hope that 2015’s 1st quarter GDP contraction would be transitory […]

Continue reading...

Monthly Stock Market Report – April 30, 2015

Stocks Trapped in Trading Range. Buy GE with 3.2% Yield In April we were pleased that all three major stock market indices hit record highs during the month, spurred by slightly better earnings reports. However, as more earnings reports trickled in at the end of the month, all major stock market indices retreated from their […]

Continue reading...

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) The 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. […]

Continue reading...

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 […]

Continue reading...

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 […]

Continue reading...

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 […]

Continue reading...