Happy New Year From All of Us at Gerritz Wealth Management

Added Valeant Pharaceuticals (VRR) to the Core Equities Folio

I bought Valeant Pharaceuticals (VRX) in the Core Equities Folio as it broke out from three month consolidation. This is a very good company that I have tracked for some time.

(Click on Chart for Easier Viewing)

Valeant Pharaceuticals

This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.

Merry Christmas

Bought Netflix (NFLX) in the Core Equities Folio Today

I added shares of Netflix to the Core Equities folio on a new breakout.

(Click on Chart for Easier Viewing)

Netflix

The Santa Claus rally is on.

All Folios and every position was in the green for the day.

Core Equities folio

Sector Rotation folio

Major Markets Folio

This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.

Las Vegas Sands (LVS) New Core Equities Folio Position

LVS is breaking out after a 7 week consolidation. I bought some in the Core Equities Folio.

(Click on Chart for Easier Viewing)

Las Vegas Sands

LVS is in the Buy Zone (blue shaded area)

Market Comment

The market is re-asserting itself after 4 days of consolidation. The intermediate trend remains to the upside so I stood pat on most of our positions.

This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.

Apple (AAPL) Mounting a Comeback

We added Apple (AAPL) to the Core Equities folio last week as it hit our buy point, Apple is currently trading around the $550 level. I think it could go to $600.

Apple

After a steep consolidation Apple looks ready to run again.

This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.

Happy Thanksgiving From Gerritz Wealth Management

GWM Core Equities Folio - Phillips 66 (PSX) Moving Higher

Phillips 66 is moving higher as it hits official buy point.











I bought PSX early, before the official buy point, because it's Relative Strength Line (RS) was moving up and buying volume was showing good accumulation (institutional buying). PSX is breaking out after an 8 month consolidation.

Phillips 66

Phillips 66 is an oil refiner.

The oil refiners prices generally move inversely to crude oil prices. So, falling oil prices are a plus for the refiners.

Core Equities Folio

Bank of America, Phillips 66, Wellpoint Inc., Raytheon Co., Gilead, Apple.

GWM Model Portfolios are 100% invested.

This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.

The Growth Stock sector Mounting a Comeback

The Growth sector is just beginning to re-assert itself after a bout of profit taking. I am adding back-in an allocation to the growth stock sector today.

Growth vs Value 

Relative Strength Chart

Growth Stocks mounting a comeback.

GWM Major Markets Folio

Major Markets Folio
is now balanced between growth and value.

We took new positions in the IShares Small Cap ETF, IWM, and in the Spyder S&P 500 Pure Growth ETF, RPG.

Meanwhile the slow market melt-up continues and is now in over-bought territory. Too many days up without a meaningful pull-back. There is a great deal of rotation going on internally; so maybe we are just getting a rolling correction of sorts. A 3 to 5% general market pullback is coming though; I just don't know when. 

This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.

ETFs or Exchange Traded Funds - What They Are and How I Use Them

ETFs are essentially investment vehicles that allow investors to purchase a basket of stocks that can target specific segments or sectors of the market, a very efficient and inexpensive ways gain exposure to the best performing sectors. Spyder Select S&P 500 ETFs are a great example.

(click on the charts for easier viewing)

Sector Select Spyder ETFs

GWM Model Portfolio currently hold  XLF, XLV and XLI.

Each of the market sectors represented by these ETFs come in and out of favor as time goes by. Utilities were top performers in early 2013, but faded badly in the second half of 2013. Financials and Healthcare are now leading the market.

Sector Rotation

GWM Model Portfolios are broken down into sub-components we call Folios. One of our Folios is called Sector Rotation.In the Sector Rotation Folio we want to invest in the leading sectors at the moment. We compare the relative performance of the sectors on a regular basis, systematically rotating into the best performing sectors.

S&P 500 Select Relative Strength Performance

10/01/2013 - 11/22/2013

The Healthcare ETF (XLV) is leading.
The Utility ETF is lagging.

Below is a Link for a short video explaining how ETFs work.

http://www.investopedia.com/video/play/understanding-etfs/

Definition of 'Exchange-Traded Fund - ETF'

A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.

Investopedia explains 'Exchange-Traded Fund - ETF'

Because it trades like a stock, an ETF does not have its net asset value (NAV) calculated every day like a mutual fund does.

By owning an ETF, you get the diversification of an index fund as well as the ability to sell short, buy on margin and purchase as little as one share. Another advantage is that the expense ratios for most ETFs are lower than those of the average mutual fund. When buying and selling ETFs, you have to pay the same commission to your broker that you'd pay on any regular order.

One of the most widely known ETFs is called the Spider (SPDR), which tracks the S&P 500 index and trades under the symbol SPY.






This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.

Financials are Supporting Market's Move Higher

You always want to see the financials do well when in an uptrend; they help confirm the strength of the move and that is what is happening now.

We own a few financials in GWM Model Portfolios.

(click on the charts for easier viewing)



Spyders Select Financials ETF (XLF)

Bank of America

CME Group, Inc.

This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.

Biotechs Breaking Out Again

Biotechnology stocks are  breaking out again and we owned some winners going into today.

Biotechs were showing signs that they were about to move. The RS (relative strength) Rating Line was rising and buying volume was picking up, so I bought the sector before the actual breakout. Consequently, we were well positioned to benefit from this breakout.

(click on the charts for easier viewing)

Biotech Index

The blue shaded box is the buy zone.

GWM Model Portfolios hold multiple positions that are biotech related.

Gilead (GILD)

Celegene (CELG)

IShare Biotech Index ETF (BBI)

This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.

Market Rotation to Value Stocks

While the market averages have held up very well, there has been a great deal of sector rotation going on under the hood.  In the last few weeks growth stocks have pulled back while value oriented stock have taken the lead.

Value vs. Growth Analysis chart

When the line in the upper panel is sloping upward, value is outperforming grwoth.

Value vs. Growth Comparison Chart

Value stocks now leading.

I have added value oriented positions to all GWM Model Portfolios, i.e., SDY and RPV.

SPDR S&P Dividend ETF (SDY)

Guggenheim S&P 500 Pure Value (RPV)

Uptrend Resumes after being under pressure

The buyer returned yesterday. I expect we will start seeing green on Market Direction Model.

I am moving to 100 % exposure to the market.

Solar City (SCTY) - A Core Equities Folio Holding

Solar City (SCTY) is a very recent addition to our Core Equities Folio. It is up over 14% since we took a position. Solar City was founded by Elon Musk. Elon is also the founder and CEO of Space X and Tesla Motors. Elon is indeed a visionary, much like the late Steve Jobs was. The solar industry currently ranks #2 out of the 197 industries tracked by Investor's Business Daily.


Company Profile

SolarCity Corporation is engaged in the design, installation and sale or lease of solar energy systems to residential and commercial customers, or sale of electricity generated by solar energy systems to customers. The Company’s solar energy products include Solar Energy Systems, and SolarLease and power purchase agreement finance products. The Company’s energy efficiency products and services include home energy evaluation and energy efficiency upgrades. The Company sells home energy efficiency evaluations to new solar energy system customers and existing customers. The Company’s other energy products and services include electric vehicle charging and energy storage. I might add, Solar City solar panels are used at the new Tesla car charging stations popping up around the country.

Addendum:

SolarCity continued its massive run as the Elon Musk-backed installer of solar energy products succeeds in getting the market to buy into its model of installment payment-based installations that match the savings over traditional electric energy. SolarCity's rally continued despite the dilutive nature of a secondary stock and convertible debt offering.

Congress Seemingly Unable to Reach Compromise on Debt Ceiling and Government Shutdown

Congress’ inability to reach a compromise to end the government shutdown and raise the debt ceiling is negatively affecting consumer confidence; consumer confidence has dropped at the quickest rate since 2008.

At this point, this mess in congress can not be ignored.  As a result I have gotten even more defensive. I have been raising cash levels systematically over the last couple weeks.

Consumer Confidence Survey

Historically, the market bottoms in October and then rallies strongly into year-end. I will take my cue from the market’s reaction to events as they unfold. 

Investors Shouldn't Fear a Government Shutdown

Why Investors Shouldn't Fear a Government Shutdown

By Steve Rothwell and Ken Sweet

— Sep. 28 3:00 PM EDT

 NEW YORK (AP) — The government shuts down. The economy unravels. Stocks plunge.

That may be Wall Street's worst fear, but history shows it's mostly overblown.

There have been 17 government funding gaps and shutdowns since 1976, ranging in length from one to 21 days. A funding gap is when federal agencies continue to operate without the passage of a regular appropriations bill. None has caused a market meltdown.

The average decline in the Standard & Poor's 500 index during one of these periods lasting 10 days or more is about 2.5 percent. For those lasting five days or fewer, the average decline is 1.4 percent.

"If they shut the government down for two days, the world's not going to stop revolving," says Ron Florance, deputy chief investment officer for Wells Fargo Private Bank.

A shutdown may even offer a buying opportunity.

Investors should consider the improving outlook for the global economy instead of worrying about Washington.

7:41 am Monday Sept 30th

As I write the Dow is down more than 100 points. At the same time, 3 out of the 4 stocks in our Core Equities Folio are up.

Core Equities Folio

Facebook Linkedin Las Vegas Sands and Celgene

GWM Model Portfolio Core Equities Folio Allocations:

Go Getter = 40%

In Betweener = 30%

Golden Years = 10%

The Core Equities Folio is primarily comprised of very large and liquid leading stocks. At times, these leading stocks follow the beat of their own drum. So, when the general market is stumbling, these stocks can actually continue to rise or go sideways. In a way, they help provide meaningful diversification.

I will more than likely be raising the Core Equities Folio Allocation to 20% from it's current 10% in the Golden Years Model Portfolio before long.

By the way, as I am finishing this blog post, all positions are now positive while the Dow is down 95 points.

8:04 am

Core Equities Folio

This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.

Facebook Comes Back with a Vengance

Facebook (FB) jumped 6% in above-average volume. The gain breaks a three-day losing streak.

Facebook (FB)

Core Equities Folio

Today's Performance

Furthermore, I added back YELP yesterday, which turned out to be timely as it rose over 5% today.

Core Equities Folio Position Weightings:

Facebook  25%

Yelp 25%

Las Vegas Sands 25%

Ford 10%

Linked In 15%