“Don’t kid yourself about what this sell-off is really about. It is about a recession.” – Jim Cramer, January 2016, CNBC
2016 S&P 500 total return: +12.25%
Where are we, at the end of April 2019?
The above quote illustrates, of course, that you can’t be TOO impressed by anyone’s prediction, even a well-known television personality (maybe least of all, such a personality). In fact, I prefer not to look at predictions. I look at the stock market internal statistics (special thanks to Lowry’s Institutional analysis). Recessions do happen and when they do, inevitably, there is a problem for the stock market. HOWEVER, the stock market has its own leading statistical indicators and they would be more reliable than whatever analysis (if any, really) was behind the above quote.
April was another good month for this ongoing bull market, which is very healthy and up substantially for the year. The average stock (measured by the NYSE Composite) was up 2.87%. Historically, we should expect some sort of correction every calendar year, but my concern is always going to be whether a MAJOR top is forming. That is most certainly not evident currently.
We had some laggard funds in April, which I’ve now sold off, specifically FENY, FHLC and FSMEX (energy, healthcare and medical equipment). The down performance in FBIOX is not something that makes me inclined to sell it. The biotech sector has a “mind of its own” and remains up over 14% YTD. I have replaced those first three with more of certain funds and a new fund, which I include in the list below: FCYIX, the Fidelity Select Industrials sector fund. It’s currently a very hot sector.
On the fixed returns side, I have been moving certain client funds into 2 new REITS, the Blackstone and Starwood. I have mentioned them in past newsletters. They pay regular cash dividends (which may be reinvested) and have histories (which we can discuss) of appreciating unit prices. Liquidity is an issue so you wouldn’t want to buy and sell in the same 12-month period, for example.
I may continue to make changes in the fixed fund allocations. I may continue to sell some of the holdings of the Stone Ridge fund (which has not set any records). Fixed returns are DIFFICULT to obtain in today’s world. I think everyone understands that.
How Did the Markets and our Funds Do in April 2019?
All index and fund returns are courtesy Morningstar.com. Here are the index returns and our fund returns:
| Apr-19 | |||
| S&P 500 | 3.93% | ||
| Nasdaq (technology) | 4.74% | ||
| Dow | 2.56% | ||
| NYSE Composite | 2.87% | ||
| Russell 2000 (small co) | 3.34% | ||
| US Aggregate Bond Index | 0.03% | ||
| ONEQ | 5.13% | Fidelity Nasdaq | Fidelity commission free ETF |
| IJR | 1.68% | iShares Small-Cap | Fidelity commission free ETF |
| FENY | -3.76% | Fidelity Energy | Fidelity commission free ETF |
| FTEC | 4.54% | Fidelity Info Tech | Fidelity commission free ETF |
| FDIS | 3.06% | Fidelity Discretionary | Fidelity commission free ETF |
| FHLC | -3.32% | Fidelity MSCI Healthcare | Fidelity commission free ETF |
| FBIOX | -4.26% | Fidelity Biotech | stock mutual fund |
| FSMEX | -2.92% | Fidelity Med Equipment | stock mutual fund |
| FCYIX | 5.12% | Fidelity Select Industrials | stock mutual fund |
| FCNTX | 4.88% | Fidelity Contra Fund | stock mutual fund |
| FBGRX | 4.93% | Fidelity Blue Chip Growth | stock mutual fund |
| PSGAX | 8.33% | Virtus KAR Small-Cap Gr | stock mutual fund |
| FKDNX | 4.06% | Franklin Dynatech | stock mutual fund |
| CFRAX | 1.70% | Catalyst floating rate | fixed income mutual fund |
| EIFAX | 1.77% | Eaton Vance floating rate | fixed income mutual fund |
| FFRAX | 1.54% | Fidelity floating rate | fixed income mutual fund |
| GIREX | 0.37% | Griffin real estate int rate | fixed income mutual fund |
| RNDLX | 0.90% | RiverNorth Strategic | fixed income mutual fund |
| FAGIX | 2.35% | Fidelity Capital & Income | fixed income mutual fund |
| LENDX | 0.20% | Stone Ridge Alternative | peer to peer fixed return m.f. |
| Starwood REIT | 0.99% | 1 month lag | real estate investment trust |
| Blackstone REIT | 0.74% | 1 month lag | real estate investment trust |
| Prime Meridian Small Bus LP | 0.29% | 1 month lag | private peer to peer fixed return |
| Prime Meridian Real Estate LP | 0.53% | 1 month lag | private peer to peer fixed return |
| KIP, Kay Income Partners LP | 0.56% | private mortgage fund |
Your investment return(s) for April 2019 was/were as follows:
We should talk if you would like to review exactly where you stand or if we should consider a change. I am available at your convenience. I have Skype video in case you would like to do a video conference.
Best,