Taking the Lead – Our portfolio is now outperforming the S&P 500! Propelled almost entirely by Facebook’s (FB) continued powerful momentum, our portfolio gained 0.8% in the five weeks since August 2, while the S&P 500 lost 3.2%. Strong showings by SPDR Gold (GLD) and SPDR China (GXC) also contributed. Our only other non-cash positions to gain ground were American Capital Agency (AGNC) and Twenty First Century Fox (FOXA). Since its January 10 inception our portfolio has gained 15.80% while the S&P 500 has gained 12.87%.
Our Facebook shares followed-up on their 56% gain last month to gain almost 16% since August 2. The stock has gone virtually straight up since its stellar quarterly report on July 24, and is now the best performing position in the portfolio. With the report showing solid earnings and revenue coming from mobile users, any news about Facebook is now seen in a positive light by traders.
SPDR Gold gained 6.2% as geopolitical tension surrounding Syria and the weak U.S. employment report for August combined to make gold attractive. Gold gains value in times of global tension, and when traders think that interest rates may not rise as quickly as previously believed. SPDR China gained 5.3% as recent Chinese economic reports continued to show an economy stabilizing at a level of 7.5% annual GDP growth. With Europe, China’s biggest trade customer, also showing signs of economic stability, traders believe that the Chinese stock market may have bottomed.
Almost all of our other stock positions lost ground over the past five weeks. General Electric (GE) was our worst performer, losing 6%. Although the company announced plans to reduce the size of GE Capital and become a mostly industrial company, GE’s stock has not been performing well in recent months. Berkshire Hathaway (BRK-B) lost 5%. Although these shares usually do well in times of turmoil, the company’s heavy emphasis on financial businesses resulted in negative stock performance with higher interest rates on the horizon. B&G Foods (BGS) followed the market lower with a loss of 3.2%, despite a dividend increase (yield now 3.8%) at the end of July. For B&G, I would use this weakness to purchase shares.
Although I am thrilled that our portfolio has now risen more than the S&P 500 year to date, I am not pleased that one stock carried the portfolio over the past five weeks. Although geopolitical concerns are obviously scaring the markets at the moment, I do not want to rely on a single position to carry a portfolio.
2013 MODEL PORTFOLIO
(As of September 6)
Stock Amount Change Index Amount Change
F $ 850.00 21.3% FB $ 1,406.40 39.5%
BRK-B $ 783.02 17.3% BGS $ 785.68 8.7%
BA $ 954.63 36.1% NWSA $ 97.14 43%
AIG $ 915.42 33.3% GLD $ 536.60 (18.4%)
GE $ 764.28 8% GXC $ 658.89 (5.6%)
AGNC $ 500.28 (27.2%) DXJ $ 828.00 19.7%
WFM $ 872.32 21.8% FOXA $ 834.60 31.6%
STOCK TOTAL – $ 8,263.49; REIT/ETF TOTAL – $ 2,523.77; CASH TOTAL – $ 792.33
GRAND TOTAL $ 11,579.59 GAIN/LOSS since 1/10/13 15.80%
S&P 500 Index GAIN/LOSS since 1/10/13 12.87%