Answers to Investors’ Inquiries

DO YOU PROVIDE SELL ADVICE ON STOCKS YOU HAVE RECOMMENDED?

— Mr. B., 08-26-15

Oftentimes I provide sell advice in my articles. 

If a stock is in a trading range, or it’s rising toward previous highs (upside resistance), I will usually be explicit about the likely near-term upside price target. I often add remarks about whether the stock might be stuck within a trading range for many months, or whether I think it will break past upside resistance in a few weeks.

For example, in this article about FedEx Corp. (FDX) from January 2, 2015 (Can FedEx Shares Have Another Blowout Year in 2015?), I said, “I expect it to trade sideways between $164-$183 for the time being.  It hasn’t really established price support yet, so it could definitely fall farther before stabilizing.” Go look at this year’s chart. FDX shares did exactly what I said they would do.

My research focuses on stocks which are expected to have strong earnings per share (EPS) growth for the next 2-3 years. Such stocks can accommodate both traders, and buy-and-hold investors.

 

IF BOND MUTUAL FUNDS ARE UNWISE TO OWN DURING PERIODS OF RISING INTEREST RATES, WHERE CAN I INVEST FOR CAPITAL PRESERVATION?  —  Mr. J., 08-25-15

In my July 2015 article, Managing Bond Investments As Interest Rates Rise, I wrote about using a short- or medium-term laddered bond portfolio strategy, as an alternative to owning bond mutual funds.

Investors can also own limited maturity bond mutual funds, which are relatively likely to maintain stable pricing as interest rates rise. 

Other safe, guaranteed, highly-rated, pre-refunded, and/or extremely low-risk investments include bank savings accounts & C.D.’s, money market funds, fixed annuities, some variable annuities, and some bonds — Treasury, corporate, and municipal — as long as they are held to maturity.

 

WE WERE NOT OVERDUE FOR A U.S. STOCK MARKET CORRECTION

Stock markets experience downturns, a.k.a. corrections, for varied and specific reasons: changes in related financial markets and economies — including interest rates, commodity prices, currency values, et. al. — can easily cause changes in stock market pricing.

Sudden emotional and/or expensive events, such as natural disasters, acts of war, or deaths of key heads of state, can cause stock market downturns.

Frenzied investor gambling behavior can cause rapid increases and decreases in the prices of individual stocks, market sectors, and/or overall market indices. This type of price run-up, prior to the fall, is referred to as overvaluation.

News flash: the U.S. stock markets have not been overvalued in recent years. Stock markets cannot be “overdue for a correction” when they were not overvalued in the first place. The ’00-’01 dot-com crash was directly related to foreseeable overvaluation of tech stocks. The 2008 Financial Meltdown was directly related to foreseeable overvaluation of housing; resulting from the easing of lending restrictions to unqualified buyers, and compounded by gambling behavior on the part of housing investors.

 

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Goodfellow LLC is a subscription-based stock market website. Stock portfolio investors pay an annual fee to read my articles, which help them profitably navigate the U.S. stock markets, with the goal of outperforming the U.S. stock market indices.

I use a combination of strict fundamental and technical criteria to choose the stocks that receive buy ratings from Goodfellow LLC. Each facet of my investment criteria serves to lower the risk associated with stock investing. My investment strategy works — year in and year out.

 

Eight of the ten 2012-2014 Goodfellow LLC model portfolios

outperformed the market averages by margins of 50-100% and more!

 

Subscribe now, and begin improving your investment portfolio returns today!

 

Send questions and comments to research@goodfellowllc.com.

Happy investing!

 

Crista Huff

President

Goodfellow LLC

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