Quarterly Market Outlook Reports

Each Quarter, our team of portfolio managers meet to discuss the trends of the previous and upcoming quarter. We assemble the trends, the impact to our portfolios and discuss which moves are prudent for the coming weeks and months. And we deliver this analysis to you every three months.

Third Quarter, 2021

The third-quarter was essentially a “washing machine” where stocks “sloshed” around. The bumpy summer months are now over and the seasonally strong time of year is now here. October has been strong in the past 20, 50 and 100 years, according to our friends at Bespoke. November is even stronger, and December is also strong. The strongest seasonal month is actually January, when new pension money likes to pour into the stock market. So essentially, the next four months should be wonderful.

Our fundamental growth stocks are poised to announce wave after wave of better than expected third-quarter sales and earnings announcements in the upcoming weeks. The analyst community revised their consensus earnings estimate up over 14.9% for our …

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Second Quarter, 2021

So far this year, dividend growth stocks have been the stars and are anticipated to continue to perform well due to collapsing bond yields. These same collapsing yields also helped our growth stocks in June after China did a commodity “dump” to squelch soaring material prices.

We are clearly in an inflationary environment that is expected to persist due to accommodative central banks. The latest catalyst for bond yields collapsing was the European Central Bank’s (ECB) recent announcement that it would tolerate up to 2% annual inflation over the “medium term” and essentially ignored the current annual inflation target of just below 2%. So just like the Fed, the ECB is going to allow inflation to temporarily “overshoot” its inflation targets. The ECB essentially …

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First Quarter, 2021

Our growth portfolios oscillated with the interest-rate-driven rotation in the market in recent weeks, but finished March on a strong note thanks to quarter-end window dressing. Furthermore, this relative strength has continued in April and our growth portfolios seem truly excited about their upcoming first-quarter earnings announcements. We believe the average stock in our growth portfolio will post stunning sales and earnings growth in the upcoming weeks, as you can see in the following link:

Sales & Earnings Projections

The first-quarter announcement season will represent “peak” sales and earnings momentum due to easy year-over-year comparisons. I should add that 2021 will be characterized by …

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Fourth Quarter, 2020

The fourth quarter was the strongest quarter that we can remember for small-to-mid capitalization stocks. Essentially, many of our small-to-mid growth stocks “melted up” on light trading volume in an “early January effect.” These small-to-mid growth stocks, as well as many of our international growth stocks, have continued to perform well due to the “real January effect” that is caused by higher trading volume and fueled by new pension funding.

Our growth and dividend stocks are “locked and loaded” for the upcoming fourth-quarter announcement season. The year-over-year comparisons …

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Third Quarter, 2020

The third-quarter was quite interesting. The stock market experienced net redemptions but continued to rally on relatively light trading volume. Nowadays, Citadel’s algorithms largely control stock prices. So the question that we are asking ourselves is if the stock market can rally on light trading volume, then what happens when trading volume soars?

As mentioned on a recent Navellier podcast, there is a lot of cash on the sidelines that is waiting to pour intothe stock market once the uncertainty of the Presidential election is resolved once and for all.

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Second Quarter, 2020

Our stocks have rebounded impressively since late March, especially our growth stocks, which are now defensive compared to dividend stocks as they are less affected by COVID-related shutdowns. As always, we are entering the upcoming earnings announcement season “locked and loaded” with fundamentally superior growth stocks that are characterized by 21.2% average annual sales growth and 79.8% average annual earnings growth. Furthermore, in the past three months,

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First Quarter, 2020

Our dividend growth and conservative growth stocks have rebounded impressively in the past four weeks. As we have said repeatedly, good stocks bounce right back and that is exactly what has happened since the late March lows. We expect to continue to sell selected stocks into strength as we concentrate on the crème de la crème and anticipate holding fewer stocks in the upcoming months due to the fact that the economic recovery is anticipated to be very narrow.

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Fourth Quarter, 2019

2019 was a year of great stock market performance and flat earnings. In some respects, it was the opposite of 2018 when earnings were up more than 20% while stocks were down. Yet if we take the averages for both years for both EPS growth and stock performance, the two years were pretty normal—on average. The 4th quarter of 2019 will be the last lackluster quarter for the S&P 500’s earnings. Looking forward to 2020, the S&P 500 will be having much more favorable year-over-year comparisons, so we expect positive guidance from many flagship companies.

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Third Quarter, 2019

Our dividend growth and conservative growth stocks are “locked and loaded” for the upcoming third-quarter announcement season. We are exiting the seasonally weak months for small-to-mid capitalization stocks and are now on the verge of when small-to-mid capitalization stocks tend to surge from an early “January effect” and remain strong well into the New Year.

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Second Quarter, 2019

Our growth stocks continue to steadily appreciate and exhibit significant relative strength compared to the S&P 500. In fact, our Large Cap Growth portfolio just posted its strongest outperformance relative to the S&P 500 and is leading all our other growth portfolios year-to-date, which are also having a good year.

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First Quarter, 2019

We remain in a “Goldilocks” environment with low interest rates, steady economic growth, and hope for the future as politicians run around and promise us everything and anything. Amidst the chaos around the world, the U.S. remains an oasis for investors.

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Fourth Quarter, 2018

The stock market has been “re-liquefied” in January and is off to one of the strongest starts in decades, especially for small capitalization stocks that have “melted up.” So far in 2019, stocks are largely responding positively to their quarterly announcements and guidance.

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Third Quarter, 2018

Our portfolios are now in the midst of another stunning earnings announcement season. Already, better than expected third-quarter earnings have been announced from Intuitive Surgical (ISRG), Netflix (NFLX), PayPal (PYPL), Progressive (PGR), and United Healthcare (UNH).

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Second Quarter, 2018

Our growth and dividend stocks have been oscillating with the overall stock market recently, but we expect that one by one, as they post better than expected second- quarter sales and earnings that operational performance may translate in better price action.

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