Money is a tool. It's something that supports your life!

We review the managed portfolios and new names we have added. We also touch on why you wouldn't want to own the 10 best stocks in the last 20 years. We also feature two articles this month by Stephan Rochon and Lance Roberts.

We’re neither bullish nor bearish. We are indifferent to which way the market is headed. If it is rising, we’re long equities. When it reverses that trend, we will be underweight equities and long bonds and cash. 

 

Interesting Charts

1) We cannot predict the future. We can only look at the past...

 

2) Are GICs really the proper investment vehicle for your portfolio? It's always best to discuss with your Advisor and tax professionals...



3)  Sectors can experience highs and lows - sometimes to the extreme - very quickly. It takes professionals that monitor market and sector movements to help you decide on where you money is best put to work...


Image Source: Optuma.com

Perspective: Owning the best 10 stocks in the last 20 years...

Even with a time machine, a lot of people wouldn’t want to own the best-performing stocks.

Morgan Housel looked at the 10 best stocks to own over the past 20 years. They were cherry-picked for their stellar returns, and the stocks you would probably choose to own if you had a time machine.

On average they increase more than 28,000%. But they all spend most of the time well below their previous high mark.

They all had multiple declines of 50% or more. A few had multiple 70% drops.

Investors underestimate how common and severe volatility is especially among individual stocks.

Monster Beverage increased 105,000% from 1995 to 2005. It suffered four separate drops of 50% or more. It lost more than two-thirds of its value twice and more than three-quarters once.

 

 

It's easy to think that the single-best investment to own is one that would make us smile every morning we woke up owning it.

But it wasn't. It never is. And it never will be. That's the nature of the stock market. On the way to making serious money, you spend a lot of time losing serious money. It's a reality anyone investing in stocks, no matter what you own, must face.

 

Technical Comments

• Finally broke above 4,000 Big Round Number.
• This is only the 4th time in the 100-year history of the S&P when it broke above a multiple of 1,000.
• When the S&P breaks above a Big Round Number or any resistance, it often soon goes sideways. The sideways move can last a few bars or many bars.
• The breakout above 1,000 came in 1998. The stock market entered a big trading range and did not get above 2,000 until 2014. It then went sideways for 2 years.
• It broke above 3,000 in 2019 and went sideways for a year.
• While the current breakout could continue up for many months, the Emini will probably be sideways around 4,000 for many months. It could get stuck here for more than a year.

Targets for bulls and bears

• Bulls want the gap to be a measuring gap. They hope that gap will remain open, and lead to a 700-point measured move up, based on the height of the wedge that began in September.
• They additionally want a 1,200 measured move up based on the height of the 2018/2020 expanding triangle. While the Emini will eventually get there (and to 10,000 and 100,000!), it will probably have several pullbacks first.
• More likely, there will be a 2-month pullback soon, instead of a quick measured move up.
• There were tails on the top of January and February. They were caused by reversals as the bars were forming.
• March did not reverse, but 2-bar reversals are common. If April were to selloff, it would form a 2-bar reversal with March.
• That would create a micro wedge top with the January and February highs, which would increase the chance of a pullback in May.
• There has only been a single pullback since the pandemic low. Only one bar (September) fell below the low of the prior bar (month).
• Pullbacks tend to be more complex as trends mature. Next pullback will probably last at least a couple months.
• Most recent bars on the monthly chart have been 200 – 500 points tall. A 2-bar pullback will probably be 10 – 20%.
• There is currently only a 20% chance that the 1st pullback will be 35%, like last year’s February/March pullback.
   

The Portfolios

March started a transition away from growth stock towards value/dividend stocks. As interest rates rise, long duration stocks like technology, start to under perform. We sold the rest of our Ark ETF’s, we sold less liquid names like Linimar and Methanex, sold tech names like Crowdstrike and Growers.  In their place we bought Finning, Applied Materials, and dividend Etfs such as The Ishares Equal Weight Bank and Life Co ETF and the Vanguard Dividend Appreciation ETF.

 
Snapshot of some of the new names
 

Applied Materials provides manufacturing equipment services and software to the global semiconductor display and related industries.

General Electric  company's products and services range from aircraft engine's power generation an oil and gas production equipment to medical imaging financing and industrial products.

 

Returns on our 60/40, 70/30, and 80/20 portfolios before fees: As of April 6th, 2021

 

 

And Something Interesting...

This month we have two articles one written by Stephan Rochon discussing rising rates and the advantages of stocks and the other by Lance Roberts discussing the rise of the retail investor.

Click here to read the article by Stephan Rochon.

Click here to read the article by Lance Roberts.