I know its boring, but I have been aggressively locking in some yields on cd's and corporate bonds. Since I continue to believe we are at the end of this 44 month cyclical bull market, the summer rally that many are betting on may or may not happen.
The Dow is locked in a trading range of about 250 points north or south of the 11,000 mark. Until the market receives confirmation of a Fed pause, trading should remain around current levels until the final outcome is known. (See June 16, 2006 post -"Dow 11,000 : Welcome to "No Man's Land")
Here are a few short term bonds and cd's that look attractive;
BELLSOUTH CORP NT 5.000% 10/15/2006- Currently selling at a discount
DAIMLERCHRYSLER NA HLDG INT NT 5.700% 01/15/2007-selling at a discount
WASHINGTON MUT INC SR NT 5.625% 01/15/2007- selling around par.
GANNETT CO INC NT 5.500% 04/01/2007-selling at a discount
VIACOM INC SR NT 5.625% 05/01/2007-selling at a discount
MARATHON OIL CORP NT 5.375% 06/01/2007-selling at a discount
LEESPORT BANK 6 MO- Yldg 5.1%, Matures 12/22/2006
FIDELITY B 7 MO - Yldg 5.15%, Matures 01/30/2007
LASALLE BANK MIDW 9 MONTH- Yldg 5.255, Matures 03/28/2007
FIRST CITIZENS NATL BK 1 YR- Yldg 5.3%, Matures 06/28/2007
WASHINGTON MUTUAL 1 YR - Yldg 5.4%, Matures 06/29/2007
*** These Bonds and Cds are for informational purposes only. Use them as a comparison to what is currently available through your broker or financial advisor.
If I really wanted to participate in a potential summer rally, I would probably buy some call options on the .SPX or .OEX. You need to realize that buying options is similar to sticking coins in a slot machine. If the market goes against you, you could lose all or a substantial portion of your bet.
For longer term investors, any weakness in the energy sector has to be viewed as a buying opportunity.
At this stage of the game, my portfolio is approximately 50-60% cash. The remainder is invested in some of the same stocks in the IA portfolio.
I must add that I do have a money manager for a portion of my retirement assets. My friend and confidant, Louis Navellier is the one handling that portion of my assets.
As I have said in this journal before, Louie Navellier and his team at Navellier & Associates are providing us with the research for our upcoming newsletter "Dynamic Growth". Navellier has had an outstanding track record applying his quantitative analysis to individual stocks.
Last fall, we asked Navellier to apply the same quantitative research to a list sector mutual funds and ETF's. What we found was the research was able to crack the code of picking winning mutual funds and ETF's in the same fashion that it picks winning stocks.
We will eventually add a Top 10 or Top 15 stock category to Dynamic Growth's Top 10 sector funds and ETF's, this way we can provide advice to any type of investor.
