Update: August 15, 2016

| August 15, 2016

August 15, 2016

 

Portfolio Update

Well, August tends to be a slow month for stocks – but it’s been even slower than I would have imagined.  Typically, August is a huge vacation month as families get ready to send their kids back to school.  But this time around, it really does feel like half the world is on vacation.

That’s bound to change in September.  Such a low volatility month could be a prelude for a lot more action in the coming weeks. Regardless, the stock market has loved the lack of volatility, and the major indexes are hitting all-time highs.

For the year, the S&P 500 and the Dow are up over 8%, the Nasdaq 100 is up 5.5%, and the Russell 2000 is up 10.5%.  Basically, just about any type of stock investing you may be doing is going to be successful this year… especially with how low interest rates are.  These returns are not bad at all.

Meanwhile, commodities and other asset classes have been a mixed bag.  The biggest gainer on the year is silver, with is up over 42% on the strength of renewed interest in precious metals.  Crude oil, on the other hand, is up just 1%, and natural gas is down 5%.  Long bonds have continued to outperform stocks, but the major stock indexes are finally doing better than the 10-year.

Finally, the Fed is inching closer to raising rates after very good job news this summer.  I don’t know if September is going to be the month, but we’re likely to see another small increase in rates this year.  For the moment, it looks like the market will shrug it off as a foregone conclusion.

Let’s take a look at some portfolio highlights…

 

Portfolio Highlights

Just a quick note:  We won’t update every open position every update.  I try to focus on the positions that have some significant news or price movement.

  • Bank of America (BAC) September 13 Calls – Between solid earnings and the overall resurgence in the market, BAC shares have done well. The bank stock broke through an important resistance level and is now trading over $15 per share.  Conservative investors should be stopped out for gains.  Peak gains so far are 159%.

 

  • Cisco Systems (CSCO) September 28 Calls – CSCO has continued to thrive off the recent run in stocks. In fact, the position has done so well that we’ve hit both of our exit points on the profit-taking side of things.  Peak gains ended up at 284%!

 

  • Yelp (YELP) November 27 Puts – The big surge in stocks has had one negative impact… our Yelp puts. Now, I don’t mind losing out on puts if most of our calls our doing well – and that’s currently the case. It’s hard to fight that kind of momentum.  But, we still need to have a share of put trades in the portfolio just in case.  Anyhow, we are fully stopped out of this position.

 

Category: AOA Updates

Comments are closed.