Update: July 5, 2016

| July 5, 2016

July 5, 2016

 

Portfolio Update

It’s been an eventful couple weeks since our last update, although you may not know it looking at current index levels.  That’s because the market plunged during the Brexit turmoil but has already recovered since investors figured out it’s not that big of deal in the US.

That’s not to say Brexit won’t have an impact on stocks, but it certainly isn’t cut and dry.  Not to mention, the trade agreements between the UK and Europe have to be ironed out, which could take a while.  The biggest issue is uncertainty, something financial markets never like.

Generally speaking, stocks are back to doing their sideways movement thing, while bonds are at all time highs.  Interest rates are so low mostly because of global economic prospects.  But, it doesn’t hurt (bond investors) that investors are looking for safe-haven type investments given all the uncertainty in Europe and elsewhere.

Another beneficiary of Brexit and uncertainty is precious metals.  Gold is up 35% year-to-date and silver is up 44%.  Put that in comparison to the S&P 500 which is only up 3% so far.  Even 10-year Treasuries are up nearly 7%.  Basically, you could have invested in most major asset classes besides stocks and done fairly well this year.

Nevertheless, 2016 still has a long way to go.

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.

  • Apache (APA) July 55 Puts – APA was one of our put positions we had in place prior to the Brexit selloff. As such, it benefited from the pullback in stocks.  We hit our first profit-taking point for conservative traders and came close to the aggressive exit as well.  Peak gains so far are 81%.

 

  • Cisco Systems (CSCO) September 28 Calls – Our newest positions were designed to take advantage of the overselling post-Brexit, and so far, they’ve done just that. CSCO has gone straight back up after losing ground during the Brexit selloff, and has already almost reached our first profit-taking exit point.  Peak gains so far are 71%.

 

  • First Solar (FSLR) September 50 Calls – FSLR didn’t get quite the bounce that CSCO experienced, but it also performed quite well when the market rebounded. Peak gains in this position are 58%.

 

Category: AOA Updates

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