The insanity continues! The DJIA continued posting all-time highs for 12 consecutive days in February. One would think that investors would care about valuation and safeguard their hard earned dollars, but since There Is No Alternative (TINA), US stock market investors continue getting herded to the edge of the cliff. What I do find amusing in the financial media is that there is acknowledgement that things are getting worse (earnings forecast and guidance is terrible, stock buybacks are slowing etc), but just haven’t reached fever pitch hubris as in past bubbles. Waiting for the market to get that state just seems like a recipe for disaster as every Joe Investor likes to call non-participant morons for not participating and reminding “Time in the market is more important than timing the market”. If I had a penny everytime I heard that mindless phrase thrown around, I’d be a lot closer to retirement 🙂
Outlook for March 2017
The odds of a US Fed rate hike have been climbing for the past few days and the Fed’s hand may be forced to raise now by another 25 basis points. Keep in mind that multiple raises were promised as the US economy is perceived by the Fed to be red hot/high pressure.
While most attention is focused on the interest rates, I am more interested in seeing how the debt ceiling debate goes. The US will hit its debt ceiling (again) in March 2017 and will need to be raised. It is not a question of whether they will raise, but by how much. How far will the can get kicked down the street? The modern monetary system is built on debt and debt ceilings have to keep climbing as the financial system will otherwise collapse. This raise in debt ceiling will have effects on a lot of things of course, as we borrow from future debt-laden generations and will eventually start chipping away at the value of US currency — which is what the Fed really wants — based on their inflation target. These issues, combined with the broad stock market climbing to ever higher levels and more geopolitical issues out of Europe and Middle East is why I have increased my exposure to the ultimate safety trade when there are tremors in the financial system – Gold (and Silver).
Not only do the precious metals give my portfolio the insurance that it needs, but being in the second year of a new bull market has provided with me some lucrative growth opportunities. Yes, its a volatile sector, but when you invest early on in a bull market, there is more room for error as I investigate and invest in little known companies outside the mainstream space. As regular readers may have heard in some private messages with me or on social media, I see investing in companies like IBM and Target (TGT) much more riskier than investing in a junior gold/silver producing company such as B2Gold (BTO.TO)(BTG) or Pan American Silver (PAAS).
Looking for some investment ideas? Be sure to check out the Top 2017 Investment Picks from the blogging community.
Our current portfolio looks like this:
As it stands, our portfolio diversification is as shown below.
What is your outlook for March 2017? What are your thoughts on the stocks mentioned here? Do you own them or are they on your watchlist? What do you think of the current market levels and buying here? Make sure to leave a comment below.
Disclosure: Our full list of holdings is available here.