October 19, 2018. At the gym yesterday, a local money manager came up to me and hollered: see how much the market is down?. Yeah, I said, down 400 points.
Time to buy, he says. Time to buy.
Well, maybe, I am thinking. The momentum indicators are pointing down. Down. The mid caps and small caps are telling us there are problems. The financials have to lead and they are weak. The momentum short term on SPY is actually up, but down long term.
So, despite that negative review, we think they will keep pushing UP the markets in front of the elections next month…..The Dow futures are actually positive as we write this. Trump cannot go into November with a collapsing market.
So, what to do. We elect to own dividend paying TERM positions, which pay us dividends but also mature at a given price, where we get our money back. Spending eight hours a day trying to time the stock market is just too time consuming, frustrating, and risky.
Bottom Line: The concern is what happens AFTER the elections. Watch China, the FANG stocks, and interest rate hikes.
Now in the 6th year of Dividend Income Investor.
Before buying any investment, GO TO CORE PORTFOLIO for a listing of current positions.
ELECTIONS MOVING IN REPUB FAVOR AFTER KAVANUAGH MESS
The most dramatic change over the last six weeks in the midterm election picture is clearly in the Senate, but the House situation has subtly changed as well. Not long ago, the most likely outcome for the Senate was either no net change at all, or a shift of one seat, so the Senate would remain under GOP control, with the majority holding 50-52 seats. Today, a Republican net gain of a seat or two seems most likely, moving the GOP up to either 52 or 53 seats, though a gain of three seats or no net change are entirely possible. There remains some chance of Democrats picking up two seats and a majority, but those odds are long, no better than 1 in 5, and seemingly getting longer…Once you saw Republicans and conservative voters coming home and getting energized for the first time this election cycle, on top of this lopsided Senate map of seats overwhelmingly in GOP-friendly states, Democrats’ hopes went down precipitously.
In the House, Democrats remain heavily favored to capture a majority; the change is that their chances of blowing the House wide open with a gain of 40-50 seats or more have diminished. In the suburban-oriented districts where most of the competitive House races are, things remain extremely challenging for Republicans. A large gender gap driven by suburban, college-educated, and younger women remains a very strong dynamic. But the more rural- and small-town-oriented districts—those with substantial numbers of Republicans, conservatives, and Trump backers—are now fully awake and engaged, moving some of those districts back away from the edge of competitiveness. Republicans were looking quite vulnerable through the summer in districts that one would never guess they would have to worry about. Today, Democrats seem more in line to score a net gain of between 20 and 40 seats.
Liz Warren blows up….please go away and take Hill with you.