Investment Portfolio +47.35%ytd — Heading Into October; Gov’t Shutdown; Non-Farm Payrolls Key
U.S. stock indices fell about 1% across the board last week as nervousness abounds over a looming U.S. Government shutdown. A deal is needed by midnight tomorrow evening (Mon. Sept. 30) if we are to avoid this outcome. And, this isn’t even the biggest elephant in the room. The real fight will be over raising the U.S. debt ceiling by October 17 — when reach our spending limit and max out our “credit card” of $17T in debt by that date.
Last week, the DOW lost 193pts. or 1.3%, to 15,258; the (S&P) lost 18pts. or 1%; to finish at 1691.75; while the tech-heavy NASDAQ moved up fractionally (0.18%) to 3781. For the year, the DOW is up 16.44%ytd., the (S&P) +18.62ytd., and the NASDAQ + 25.24%ytd.
My portfolio, finished up a staggering 7.35% for the week last week and now sits at +47.35%ytd. I am practically numb from my investment success this year, and I shattered my previous best of +34%. Hopefully, I can navigate these next three months so as to preserve most of those gains; and, maybe even increase them. I was “in the right place at the right time,” so to speak — the bio-pharma sector from the beginning of this remarkable run at the beginning of this year. I doubt if I will ever have another year like this one with respect to investing — for the rest of my life — though, I would love to be proven wrong on this statement.
It was somewhat bemusing to read Mark Hulbert’s (editor of the widely read Hulbert Financial Digest) article in yesterday’s Wall Street journal (Sat., Sept. 28) with the title, “Don’t Be Fooled — This Is No Stock Picker’s Market.” That is exactly what I have been doing all year to reach +47.35%ytd. “Buying and holding a broad-market index fund remains the best course of action for most investors.” Fine, let him manage his money that way. I don’t ascribe to his theory — unless the circumstances dictate. And, as evidenced by my gains this year — I am glad I have not followed this bit of advice — this year.
The potential shutdown of the USG this week — is the dominate issue that will impact stocks. How much of a “hit” stocks will take, depends on how long an impasse goes on between the POTUS/Senate and the House Of Representatives. The longer the shutdown, the more stocks are likely decline. If you are a trader like me, then be prepared to lighten up on stocks in the immediate short-term, and/or, set some “floors” or target price whereby your stock positions automatically sell should your holdings fall lower than you are willing to tolerate. If you are a longer term investor, any pullbacks should be bought IMO — for those companies whose outlook remains solid.
Besides the potential for the U.S. Government shutdown overhang, we will get lots of PMI and ISM numbers from across Asia and Europe. And, we get the all-important September Non-Farm Payrolls number (on the number of net new jobs created in the U.S.) Friday (Oct. 4) morning at 0830. I will have a note out in the next day or two on what the street is expecting. Whether or not Italy’s fragile coalition can keep things together there — politically — will a1lso be important. All for now. V/R, RCP