*ALERT* Newsletter Portfolio Changes
Image: The markets are selling off rather aggressively today, June 11, but it is important to keep things in context. Above, the NASDAQ 100 Index (NDX) just hit all-time highs recently, and some profit taking is to be expected. Though it will make for scary headlines, the move today isn’t out of the ordinary after such a strong run higher.
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By Brian Nelson, CFA
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We’re making a couple tweaks to the simulated newsletter portfolios today. It has been one of the strongest bull markets we’ve ever seen off the March 23 bottom, and while we continue to be optimistic about some of our favorite ideas, we are now re-positioning the newsletter portfolios after taking advantage of the surge.
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In the Dividend Growth Newsletter portfolio, we are removing Cracker Barrel (CBRL) and Bank of America (BAC). Cracker Barrel no longer fits the criteria for the Dividend Growth Newsletter portfolio, and we expect the banks to continue to suffer as the economy muddles along and as Fed policy may offer headwinds to net interest margin expansion.
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In the Best Ideas Newsletter portfolio, we are removing the Vanguard Real Estate ETF (VNQ) and the SPDR S&P Aerospace and Defense ETF (XAR). We think the REITs may continue to face pressure as rents become more difficult to collect in a COVID-19 world, and we think the aerospace industry has largely bounced back to fair value, in many individual cases.
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We are also adding a 1% put option weighting on the S&P 500 SPDR (SPY) to both the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio (August 21 expiration, $295 strike). Much like the protection we have in the High Yield Dividend Newsletter portfolio with the SJB, we think this move is prudent to “hedge” against downside risks.
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We’re available for any questions.
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Brian Nelson owns shares in SPY and SCHG. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.