Update: September 26, 2016

| September 26, 2016

September 26, 2016

 

Portfolio Update

The markets have been more interesting of late, but overall performance has been pretty stable.  For instance, after all the news items over the past couple weeks, the S&P 500 is still holding its year-to-date gains at around 6.5%.  We’re still looking at a full year return between 5%-10% unless something really significant happens in the news.

As you know, the biggest factor in stock price movement remains concerns/predictions regarding interest rates.  It’s all about what the Fed says and does – not just at the FOMC meetings, but anytime a Fed member gives a speech.

The September FOMC meeting fell in line with expectations.  No interest rate increase this time, but there’s expected to be one by the end of the year.  Odds are currently putting the first rate increase in December.  Economic numbers could change that timeline, but so far, it’s a pretty good bet.

The best performing major (or somewhat major) asset class has been taken over by sugar of all things!  But since sugar isn’t easy to invest in, the next best performer is silver, up 39% for the year.  Precious metals continue to do well overall, spurred by interest rate uncertainty.  You can expect more of the same in the coming months.

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.

  • Intuit (INTU) October 105 Puts– INTU continues to be quite volatile, with pretty hefty swings in each direction. During the last dip, we did hit our exit point for conservative profit-taking – before the stock ticked back up again.  We’re now in the midst of what looks like another downtrend.  Don’t be afraid to take profits on the next big down day.

 

  • Valero (VLO) October 55 Calls – Valero ticked up to the 200-day moving average just over a week ago before pulling back somewhat this past week. However, the brief rally was good enough to hit our conservative exit for profit-taking.  Peak gains in this refinery are up to 87%.

 

  • Morgan Stanley (MS) November 32 Calls – We just grabbed these MS calls last week and they’ve already seen plenty of action. We’ve been up as high as 23% on the position before today’s pullback.  The drop was due to greater market action though, so nothing specific to worry about.  Keep in mind, we have until late November on these options.

 

Category: AOA Updates

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