All eyes are on the Federal Reserve today, with the majority of investment pros anticipating the long-awaited rate increase.
Much has been made about the pros and cons of rising rates, but the bottom line is this: if the Fed does increase rates, it will be just a smidgen; the market has already priced this change in; and as I write this, the Dow Jones Industrial Average futures are up significantly, counting on that rise.
Rate increases and decreases are all a part of the economic cycle. Stocks always become volatile when there are any periods of uncertainty, and the pundits have milked the question of rate boosts for all its worth, adding to the hype. All other things being equal, once the decision is made, we should see a period of relative calm in the markets for the next couple of weeks.
Long-term, the economy is continuing to improve, with more folks finding jobs, rising retail sales and a housing market that is still pretty darn good.
That doesn’t mean we won’t see pullbacks and continued volatility. But sentiment remains about the same as last month’s barometer. You’ll see in our Market Views section that our advisors continue to remain cautious and defensive, at least short-term.
As evidence of continued economic improvement, our Spotlight Stock, which serves the railroad industry, is benefiting from that sector’s double-digit growth. In our Feature, I further explore this segment, which contributes an additional 15,000 jobs to our economy each year.
Growth stocks remain the favorite of our contributors this month, with a widely-diverse group represented, including a fitness clothing/accessory company, Oprah’s new favorite healthy business, a real estate outfit, a home builder and an organic/natural grocer. Hmm … sounds like a theme here, doesn’t it?
We also offer several tech names in the growth arena, in transportation, cloud, Internet, telecom and electronics. International stocks are coming back in focus, and we have two for your review this month.
Our Healthcare and Biotech recommendations include a tech company, a couple of pharmaceuticals, and a biotech that not only creates drugs for human consumption, but also just won approval for a genetically-engineered salmon.
Value stocks—still trading at incredibly low valuations—are not forgotten, and we include a couple of tech companies, an egg producer, two commodity stocks and a fast-food business. And with interest rates on the rise, the financial sector looks attractive, and here, we offer three very different types of companies to consider for your portfolio.
Lastly, for subscribers who like a little speculation, we have two low-priced stocks for you. Our Funds and ETFs section has a wide range of offerings in the international, energy, tech and stock-pickers’ styles, as well as a short ETF to hedge the broad market.
It’s the end of the year, and that means it is time to consider some financial housekeeping. With that in mind, I’ve just added a couple of contributor articles regarding mutual fund distributions and tax-loss selling to our new website. You can find them here: Tax Loss Selling and Year-end Distributions.
