Goldilocks Markets Still Hanging Around
By: Tim McPartland,
After last weeks weak employment numbers we expected some weakness in the stock market this week. Well, we did have some softness today and it lasted all of about 30 minutes and then it was up and up ending with a gain of 118 Dow points. Stocks went up in pretty much all segments and in particular in the crude oil and related areas (MLPs) as West Texas went up 5%. Apparently now all of a sudden there are claims that U.S. drivers are driving more and this is chewing through gasoline stocks–we may not really buy this, but it is of no consequence because there is no rational reason for prices to move either up or down. With the warring in the middle east who needs demand–just war.
Interest rates today simply hung around the 1.90% mark on the 10 year treasury–no matter the weak employment numbers. I think we have reached the point where markets move on whatever traders decide is important (or credible?) news for the week. In the end as long as we make money it is fine with us. Of course we will be pissed when they tank the markets with their fiddling around.
We did move ahead today and buy 500 shares of Leisureworld Senior Care (ticker:LWSCF) our favorite Canadian income issue. This company is extremely well run, but tough to buy as volume is so light on the OTC market. When/if the dollar weakens this issue should fly. Additionally we added to our position in the Gladstone Investment 6.75% term preferreds (ticker:GAINO). Being a term preferred this should provide some safe income with reduced volatility.
With these purchases we bring our cash position in the 2015 Blended Income portfolio back down to 8.95% which is a level we feel comfortable about at this point in time.