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Detective
Commentary
September
2010
Commentary
(9/4/10)
Review of August 2010 Results &
This Month's Changes
More Down Than
Up
With seven of our Industry portfolios in
positive territory, one at breakeven, and eight recording losses, August
was a mixed, albeit more down than up, month for dividend stocks.
Our single stock Large Bank portfolio, up
5%, and Preferreds, up 3%, on average, did the best. On the downside,
our Regional Bank portfolio, down 8%, and our Oil Industry portfolio,
down 6%, were the biggest losers.
Of our Sample Portfolios,
only one, the Conservative Portfolio, up 3%, was in positive territory.
Our High Yield Speculative portfolio dropped 1% and our Growth & Income
portfolio averaged a 4% loss. For comparison, the overall market, at
least as measured by the S&P 500, dropped 5% in August.
Here’s the complete Industry
Portfolio list.
|
Portfolio |
Last Mo.
Average Return |
|
Large Banks |
5% |
|
Preferred Stocks |
3% |
|
Canadian Income (Business) Trusts |
3% |
|
ETF Monthly Income |
2% |
|
Canadian Royalty Trusts
|
2% |
|
Utilities |
1% |
|
Business Development Corps. |
1% |
|
Closed-End Funds |
0% |
|
Real Estate Investment Trusts |
-1% |
|
Partnerships - Energy |
-2% |
|
Insurance |
-2% |
|
Dividend Speculators |
-3% |
|
Manufacturing & Services |
-5% |
|
Partnerships X-Energy |
-5% |
|
Oil Industry |
-6% |
|
Regional Banks |
-8% |
What Happened?
A spate of weak economic reports, especially home sales and unemployment,
stoked fears that the economy was heading back into recession. However,
the mood turned upbeat as soon as September arrived and last Friday’s “not
as bad as expected” employment report helped to moderate double-dip
recession fears.
What’s Next?
In our view, we’re not out of the woods yet. Economic reports will
probably remain mixed and the market will likely continue to overreact to
each one. We're still advising a cautious approach. Hope for the best but
be prepared in case the market dips. Continue to invest only cash that you
won’t need for six to 12 months so that you can wait out unexpected market
downturns.
“Monthly Dividend Scoreboard”
That’s the new name for our unfiltered (not researched) list of more than
100 stocks and funds paying monthly dividends. These could be regular
stocks, trusts, bond funds, real estate investment trusts; you name it.
The only qualification is that they pay at least 3% yields. But we’ve done
much more than rename the portfolio.
The Monthly Scoreboard, now updated daily,
sorts the list into categories such as corporate junk bonds, utilities,
preferreds, etc. The Scoreboard lists the 12-month, year-to-date, and
one-month returns, as well as our experimental “trend score” for each
category and for each security within a category.
You can use it to see which
monthly-payers are doing the best right now. Check it out and tell us what
you think. By the way, the regular Dividend Scoreboard that we added last
month does the same thing for all high-dividend categories, not
necessarily monthly payers.
New Picks
This month, we’re adding one new pick to our Preferred portfolio that is
paying an expected 6.9% yield, and, as an added bonus, has 6% appreciation
potential. However, this preferred is below investment quality (junk)
rated, so it’s suitable for speculative funds only.
We’re also adding a new master limited partnership to our Energy Partners
portfolio that is paying an expected 8.4% yield.
Rating Changes
A recent event has dramatically improved the outlook for one our
Partnerships Ex-Energy portfolio picks, and we’re upgrading it to “buy”
from “do not add.”
In our Preferreds portfolio, we’re upgrading one “do not add” rated
preferred to “buy” and downgrading another “buy” rated issue to “do not
add.”
Due to falling natural gas prices, we’ve downgrading two “buy” rated
Canadian Energy picks to “do not add.”
Sell
The outlook for one long-time member of our Manufacturing & Services
portfolio has markedly deteriorated over the past few weeks.
Sample Portfolio Changes
We’re replacing one pick each in both our Conservative and Growth & Income
Sample Portfolios.
For the details, please go to
our
Premium
Subscriber's
page.
If you're not a subscriber, you
can sign up here.
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