• Home
  • Firm
  • Services
    • Services Summary
    • Retirement Planning
  • Portfolio
    • Our Investment Approach
    • Socially Responsible Investing
  • Custom Approach
    • Difference
    • Financial Planning
    • Retirement Planning
  • Articles
  • Blog
  • Fees
  • Contact
Montecito Capital Management I Investment Advisors

Investment Insights I Market Outlook & Investment News

Investment Insights & Financial Facts for the Month of August 2015

8/18/2015

 
-Stock market corrections, technically defined as -10%+ drops, are natural and typically occur every 18 months or so - the last one was four years ago.  All sectors are off over -2% today.  We are finally finding some bargains in healthcare & consumer staples today – these sectors are more resilient during sharp market drops.

-Markets capped a week of Aug 21st with volatile sharp selloffs on Thursday and Friday.  All major indices declined in the worst week of trading since 2011 and are now in negative territory for the year; notably, the Dow Jones Industrial Average, the NASDAQ, and the Russell 2000® Index slipped into correction territory after falling 10% below their recent peaks. Sectors to overweight when markets sell-off are utilities, consumer staples and certain pockets of health care. Sell positions that simply are not working. If they are not working in a strongly rising market, they will hurt your portfolio more when the market drops. Periodically reduce winning positions back to original portfolio weightings. This allows you to harvest profits but remain invested in positions that are working.


-We continue to increase allocations to strategies that benefit from negative market forces of prolonged market volatility as downward market trends persist; marked by signals of investor capitulation related to China/Greece/Fed worries. For example, one of our liquid tradable manager strategies benefits from market weakness and volatility and returned +50% in 2008; this fund had a +16.9% annual inception return since 2006, returned +8% in 2014 and +7.3% year-to-date thru 8/21/15. This asset class category of funds all have daily liquidity and are tradable within our Charles Schwab Institutional platform.

-Fed's aggressive easing policy of cheap money has fueled high margins, high executive stock-option compensation drove stock buybacks, along with stock culture fixation with short-term results. Over the past several decades senior executive remuneration moved from 20% stock option to 80% today. For example, Goldman Sachs estimated the stock indices would get a $1 trillion lift for company stock buybacks in 2015.

-A helpful equity investment article we published, "10 Stock WInners in A Market Crash"


-New Stocks Top Billionaire Hedge Fund Managers Are Buying Now: Williams (WMB), Mylan (MYL), Facebook (FB), Broadcom (BRCM), Applied Material (AMAT), Perrigo (PRGO), JD.Com (JD) & Dow Chemical (DOW).  All of these stocks are current acquisitions holding by multiple billionaire hedge fund managers.

-Famous investor, Carl Icahn via Twitter "If more respected investors had warned about the market in '07, we might have avoided the crisis in '08. I think the public is walking into a trap again..." In a later CNBC interview, Icahn expressed his worry about "fudged earnings" and espoused his view that many publicly traded companies are using creative accounting to boost their share prices.

-US high-yield bond funds -$1.2 billion in outflows, US investment-grade corporate bonds biggest cash withdrawals since June 2013, at -$1.8 billion

-Are Mutual Funds Under Fire? Charles Schwab, the leader in no-load mutual funds, pulled in $253 million into its mutual funds over the past year, compared to $32.8 billion into Exchange Traded Funds (ETFs).
https://twitter.com/MontecitoCapMgt

Comments are closed.

    Follow us on Twitter: @MontecitoCapMgt

    Monthly Archives:
              

    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015

    Categories

    All

    RSS Feed

We Would Love to Have You Visit Soon!


Hours

M-F: 6:30am-6pm

Telephone

1-805-965-7955

Email

contactus@mcapitalmgt.com