TGIF! April 8, 2016

By April 8, 2016 Weekly TGIF

Bedell Frazier Investment Counselling - TGIF!

Yoyo

This week the market saw some big back and forth action as price yo-yo’d around.  Monday was pretty flat Tuesday the S&P 500 declined 21 points, Wednesday turned around and was back up the same 21 points….Thursday gave back 25 and today rallied 6. We saw over 100 points worth of up and down moves yet the S&P only declined 25 on the week.  This type of action is very common as price is digesting the big 14% move off the February lows.  The market is in a sense jockeying for position between the Bulls and Bears.

This year has shown some very unique leadership in stocks.  Metal and miner stocks, Telecom Stocks and Utility Stocks are the stand out sector performers with double digit returns.  Compare that to more risk on growth sectors such as Biotechs which are down -14% on the year, Small cap stocks and the the Nasdaq which are -3% on the year.  Traditionally these areas are harbingers for solid growth.  Not utilities and telecoms.  Technology, financials and consumer discretionary stocks are up around 2% to 3% on the year, which are severely underperforming those  traditional safe haven sectors of telecom and utilities.

The Bond market continues to rally as interest rates fell again this week.  Capital continues to move into the safety of bonds, and long dated bonds at that.  Just another sign not usually associated with a strong growth environment.  We would like to see rates start moving higher at some point.  This year will continue to be about manufacturing returns.  We’ve been busy writing a number of covered calls the past few weeks, and intend to continue this in the short term.  We’ve trimmed some overweight positions and exited some other tactical holdings banking some gains on the move up.

Tax time is upon us!

The countdown is on with just one week to go until tax day!  But procrastinators are rejoicing this year because the filing deadline has been pushed out to Monday April 18th due to Emancipation Day (April 19th if you live in Maine or Massachusetts).

As a friendly reminder, we are here to help you or your tax professional with last minute questions.

Will you need cash to pay the tax man?  Give us a call so we can raise cash in your investment account if necessary.

Do you need to fund your IRA for the 2015 tax year?  You have until the tax filing date 4/18/2016 to make a contribution for 2015.  Contact our office ASAP if you need assistance funding an IRA or other retirement plan account.

By Mike Harris and Meredith Rosen