Outlook for May 2017

Things have been chugging along in the markets. As regular readers may have noticed, I have been fairly inactive in my posts on this blog. My work has been very demanding lately and I havent had enough time to dedicate to write new posts and share with you. In fact, I havent been able to follow the markets either….which isn’t a bad thing….taking a break from the lunacy of the stock and bond markets allows me to focus my attention elsewhere. 

Outlook for May 2017

 

May is also slotted to be a very busy month for me personally, so I will simply be making my regular contributions to index funds and not really try to make any drastic moves.

The big news that has affected my portfolio in the month of April was the moves made in GDXJ — where the ETF company decided to add a big exposure to the senior miners even though the fund’s mandate is to focus on junior miners. As a result, the fund has seen tremendous outflows and has rocked the junior mining space. As a result, most of my portfolio has taken a beating over the month and provides some great investment opportunity. Keep in mind, that the metal prices are still up and nothing has changed in any of the copmanies’ fundamentals. As a result, there are plenty of pickings available for ppl looking for position initiation and/or addition.

My current exposure to the space is outsized and I am comfortable with that exposure. I dont imagine buying more, unless an unpassable opportunity comes up.

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 May 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.

12 thoughts on “Outlook for May 2017

  1. Well I think that your portfolio is a bit to heavy on Basic materials and utilities. For example my first 3 investments in US stocks was JNJ, INTC and T. You should consider adding T to your portfolio as it has dropped heavily and yields over 5% now. Sadlly I jumped in to soon with 40$ purchase price. As I see it is trader bellow 39$ now. If you want to be safe also add VZ, but I dont like that stock as it is very heavily leveraged after their buyout from VOD.

    • Thanks for the suggestions, Project2035. I used to be a T shareholder until last year, but sold after their decision to not follow through on debt reduction and going completely the other direction and taking on more debt to fund the Time Warner takeover. I have no trust in the management’s decision making process and wouldnt want to own T, even if that means 5% in dividends. Other telecom companies also have a heavy debt load, and I will be looking elsewhere for my investments dollars to find home.

      R2R

      • Yes, agree on that debt thing. Dont like high laverage myself 🙂 Financing of expansion is not a bad thing if that adds up extra EPS. As long as new invesent (TW) generates enoug to repay for it self and some extra earnings on synergy. I find T interesting. And its dividend aristocrat with highesy yield 🙂

  2. JC says:

    The GDXJ moves have been crushing my short put positions there and it’s really hurting because gold hasn’t made a move that would justify the juniors selling off this hard. Oh well, I’m perfectly fine getting long GDXJ at most of my strike prices so if that happens then I’ll just turn around and sell calls against them which are usually quite juicy considering the risk in gold and gold related investments is to the upside which means richer option premiums. There’s just so much interest in the GDXJ right now that it’s put them in a bind especially with some of the Canadian juniors. They were pushing up on the I think 20% ownership cap before according to Canadian law they have to give a buyout offer to all investors. So their hand was kind of forced into having to pick up GDX in order to get around that.

    Overall I still feel the market is expensive and wouldn’t mind seeing at 10% pullback. I can’t believe the moves that the market has made since Nov especially since it’s all built on promises of things to come and nothing has actually been passed. And US GDP for 1Q was pathetic at 0.7%, I think it beat their revised estimates, but it started around 3.0% at the beginning of the quarter so that’s a huge miss there.

    QCOM is looking interesting in terms of individual companies to invest in. That 4%+ yield and beaten down valuation sure is tempting.

    Glad to see you back writing a bit and hopefully May won’t be as busy as you expect.

    • Yes, the moves from GDXJ are insane. It is a junior focused company and now that the Canadian law forces them in a certain direction, they have put a big chunk towards seniors. What a trainwreck! Investors will obv leave and find other ways to invest in these companies. Meanwhile, the junior miners are more attractive than ever due to these issues. If I didnt have a full position, I’d be backing up the truck.

      Havent looked into QCOM lately…didnt they have a lot of legal issues with AAPL lately?

      Best
      R2R

      • JC says:

        The QCOM/AAPL issue is ongoing. It essentially boils down to AAPL withholding payments that they are obligated to pay via contracts in place because they think they are having to pay too much for QCOM IP. So now QCOM is withholding payments to AAPL, and I think some of its suppliers, in the amount that AAPL has withheld from paying to QCOM. I don’t think much of anything is going to come from this and it’s essentially just a staring match between the 2 hoping the other one blinks, of course QCOM has the legal right to that money from AAPL due to the contract. Pretty much AAPL is trying to bully their way into lower fees on QCOM’s IP but this should all get settled is my guess.

  3. Thanks for the update and good luck keeping busy! I’d heard that GDXJ had to expand their mandate because the fund became too popular, but sorry to hear you were impacted.

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