Running with a Bull Comes with a Few Caveats

After a seriously bullish run during the final month of what is on pace to be the best year for stocks since 2013, it seems only fitting that the last full week of the year finishes out in a blaze of bullish glory.

Stocks are en route to put in a gain of about 0.70% during this holiday-shortened week, and that’s a fitting cherry on top of a benchmark domestic index that’s seen a remarkable year-to-date total return of nearly 32%. Now, as good as this year was for the broad market, most of the analyst commentary I’ve read has predicted more upside to come in 2020.

In assessing the totality of this commentary, I generally concur with the conclusion that 2020 will see a continued move higher for stocks. The bullish argument that I basically agree with says that worries about the global economy have receded significantly thanks to the U.S.-China trade deal and to three interest rate cuts this year from the Federal Reserve. Both of these key positives are nearly the polar opposite of what they were this time last year. This is why last year (December 2018) was a horrible milieu for equities.

Still, we’ve all heard the familiar disclaimer which warns that “past performance is not indicative of future results.” Well, that was true in December 2018, and it’s still true this December.

So, while the macroeconomic environment is very favorable as we begin 2020, a new year always brings new challenges and new uncertainties — especially when it’s an election year. Moreover, with stocks at record highs and with historically high equity valuation levels, it probably won’t take much of a slip in the economic data or on the earnings front to bring the volatility right back to the corner of Wall and Broad.

As for the portfolios in this service, our holdings in the Income Multipliers Portfolio are having a fantastic year. You can read all about the performance of these stocks in the January issue of the newsletter, available right now at JimWoodsInvesting.com.

As for the Tactical Trends Portfolio (TTP), the past several months have brought us outstanding gains. The table below shows the performance of our current holdings ever since their respective recommendations.

The gains here have been particularly strong during the fourth quarter. Check out the chart below of the TTP holdings since our Oct. 4 purchase of Apple Inc. (AAPL). As you can see, the trend has been distinctly higher in each.

I expect this trend to continue as we enter 2020, but more importantly, I expect to add more big winners that deliver big gains the likes of Apple and Edwards Lifesciences (EW) to our TTP mix. So, in the year to come, get prepared for more tactical upside.

Finally, I want to wish you a very safe and happy New Year.

In the name of the best within us,

Jim Woods

Editor

Intelligence Report