SYNOPSIS
We have concerns about the current state of the equities markets. And, it’s not because last week was a down week for the indexes, and they didn’t reach even more record highs. It’s because the stock markets are breaking down internally, and that is not revealed in the major indexes. We measure the broad market simply by calculating the percentage of stocks which have positive trend values. We’re generally happy with 60%+, but only 46% of the stocks in the S&P/TSX Composite Index are now trend-positive, and the S&P counterpart has dropped from 77% to 67% in the past month. The S&P number isn’t worrisome yet; but we should be cautious about new purchases, especially in Canadian equities.
PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) dropped to 85% last week. We’re still well ahead of the S&P/TSX Composite Index APAR, which fell to just 1% and the S&P 500 APAR now down to 21%.
We sold three positions last week and didn’t buy anything. A slow-down in APAR is, of course, another sign of a weakening market overall.
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PTA Perspective… Looking for Income? Try High Yield ETFs!
In a rare departure from our emphasis on capital gains to “Make as much money as we can, as fast as we can!”, we’re going to turn things around and look at income opportunities from investing in equities. In particular we’ll discuss the many variations on income acquisition that can be obtained using ETFs… where even income opportunities trade like stocks. So, we’ll be discussing how to “Earn as much yield as you can, as fast as you can!” This is not something we normally advocate, but even for active investors, there can be a time and place when parking profits from capital gains inside a high yielding income security may be preferable to holding income-less cash.