Stock Market Video
The Year of Risk
This Week’s Fortune Cookie
In Case you Missed It
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In this week’s stock market video, Cabot’s V.P. of Investments, Mike Cintolo, talks about his bullishness toward the overall market (including some encouraging action from small-caps) and reviews a bunch of growth stocks that are set up nicely in multi-week (some are multi-month) consolidations. If the buyers dive into these names in January, there should be a ton of new leadership to latch onto!
Watch the video here.
The Year of Risk
I’ve always been interested in the Chinese zodiac. While it contains the same number of celestial personality types as the western version, it operates on a cycle of 12 years, rather than 12 months. For people who straddle the two cultures, that means that there are a total of 144 possible personality types (or whatever it is that such systems explain). So will a person born in the Year of the Rat who’s also a Gemini have more in common with Geminis from the Year of the Horse? And how about a Year of the Dragon/Taurus versus a Dragon/Aquarius?
It’s all too confusing for me. And frankly, I’m not sure that a dozen random animals and mythical figures are going to give me much of an edge on the market as the new year develops.
But one thing that’s not confusing is that 2015 is going to be a year when lots of people take risk very seriously. And that’s because more and more U.S. Baby Boomers are going to be retiring and setting sail on the seas of post-paycheck existence.
Living on a “fixed income” has always been a chilling prospect for retirees. People who are dipping money out of their retirement accounts rather than pouring money in tend to take budgets a little more seriously. And unexpected occurrences like dying water heaters and emergency dental work begin to look scarier.
I’m very much in sympathy with those who begin to see risk as a very real threat, rather than a vague concept.
But I don’t have a lot of patience with people who think that they can eliminate risk completely. No matter how much money you have, or how carefully you work to grow it and protect it, you are going to have risk.
There’s a nice quotation from Helen Keller that I’ve always liked. Usually only the last sentence is cited, but without the rest of what she has to say, it comes off a little New Age hopeful. When you get the whole thing, it has a little more muscle:
“Security is mostly a superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure, or nothing.”—Helen Keller, The Open Door.
I think Helen is right. There is no real security. If you put your whole portfolio in cash, inflation will nibble away at it like rats with a silo of grain. And these days, with interest rates still in the cellar, Treasury bonds are just as bad.
Buying index funds is the usual strategy for conservative buy-and-hold portfolios, but the crashes of 2000 and 2008 are fresh in many investors’ minds.
Probably the best strategy for outrunning both risk and inflation is a nicely diversified portfolio of value stocks (which have less volatility and will eventually reach their proper prices) or a portfolio of dividend-paying stocks, selected for both price appreciation and regular yield.
For those of you who share my desire to take a more active role in helping your portfolio to outrun both the mice of inflation and the wolves of market corrections, I suggest that at least part of your portfolio be in growth stocks, using market timing and active risk management to keep the risk battened down while you pursue the strong stocks that can deliver real gains for your portfolio.
That’s what I do, and with the help of Cabot’s advisories like Cabot Market Letter and Cabot China & Emerging Markets Report, you can outrun the bears and take the bulls by the horns. And if that’s not a daring adventure, I don’t know what is.
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The Next Apple?
If you missed the computer revolution of the 1990s, the Internet revolution of the 2000s, or the energy boom of the past 10 years, this is your chance to get in on the ground floor of five of the greatest technological revolutions the world has ever seen.
Here’s a sneak preview of the life-changing wealth that awaits you!
. II-VI: $5,000 explodes to $521,150 in laser technology
. EMC Corporation: $5,000 jumps to $463,200 in data storage technologies
. Qualcomm: $5,000 rises to $461,599 in wireless technology
. Oracle: $5,000 soars to 8,571% gains as the pioneer in enterprise software
. Diodes: $5,000 jumps to $430,050, providing the next generation of power chips
My 2015 profit forecast explains why. Click here to get it now.
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Here’s this week’s Fortune Cookie. Remember, you can always view all of the buttons by clicking here and all the Fortune Cookies by clicking here.
Tim’s Comment: P.J. O’Rourke can be both funny and wise, sort of a modern-day Will Rogers, and in this case he’s both. Rationally, I know that luck (or chance) balances out in the long run, and I’m fine with that. But government? The bigger it gets, the less I like it.
Paul’s Comment: There’s no doubt that government can get too big, although ideas about what “too big” looks like vary widely. Personally, I get just as worried when corporations get so powerful that they can lead legislators around by their wallets. And if banks remain “too big to fail,” what’s to be done about that problem unless government does it?
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In case you didn’t get a chance to read all the issues of Cabot Wealth Advisory this week and want to catch up on any investing and stock tips you might have missed, there are links below to each issue.
Cabot Wealth Advisory 12/29/14 – The Danger of Holding Too Much Cash
Chief Analyst Tim Lutts of Cabot Stock of the Month answers a question from a Cabot Wealth Advisory reader who’s heavily invested in cash and precious metals. Tim explains how inflation can erode non-performing assets and suggests value stocks for safety and income. Tim also gives the third of his 10 revolutionary stocks. Stock discussed: GoPro (GPRO).
Cabot Wealth Advisory 12/30/14 – Good Defense and Growth Stock
Mike Cintolo, Chief Analyst of Cabot Market Letter, takes on the Monty Hall conundrum in this issue and talks about the strong stock/weak market paradox. He’s bullish, but cautious. Stock discussed: Avago Technologies (AVGO).
Cabot Wealth Advisory 1/2/15 – The Best Investing Resolution for 2015
In this issue, I talk about why it’s so hard to keep New Year’s resolutions and how you can actually manage it, even in your investing behavior! Stock discussed: Baidu (BIDU).
Sincerely,
Paul Goodwin
Chief Analyst, Cabot China & Emerging Markets Report
