Sure looks like a market struggling with rotations between growth and value stocks. One day the growth stocks sell off on fears of higher interest rates and rising inflation or something–and because after such a strong rally in the style growth stocks are very expensive. And that same day value stocks move higher because increasing economic growth is a very, very good thing for a style that depends on a strong economy for much of its revenue gains. The next day the market’s preference reverses and growth again outperforms value. What’s a poor investor to do? Especially the long-term investors with very long time horizons that are the focus for my new “Millennial Portfolio (for investors with more time than money.)” How about a few stocks that offer both growth and value? I’ve got two stocks today that I’m going to add to the Millennial Portfolio: Deere (DE) and Southern Copper (SCCO)
Copper has rallied–again–to a new 10-year high and that has taken Freeport McMoRan Copper and Gold to $39.53 today, April 28, as of 3:50 p.m.. That’s above my target price in my Jubak Picks Portfolio of $34. So today I’m selling this position. The stock is up 39.34% as of 3:50 p.m. New York time since I added it to the portfolio on January 6, 2021. I still have substantial exposure to copper through my positions in Southern Copper (SCCO) in my long-term 50 Stocks Portfolio and in my Dividend Portfolio.
NextEra Energy Partners (NEP), a subsidiary of utility NextEra Energy (NEE), will buy wind farms in California and New Hampshire from Brookfield Renewable Partners. The wind turbines have a combined capacity of 400 megawatts and have long-term contracts for their electricity. I added shares of NextEra Energy to my Dividend Portfolio on November 25, 2020. The stock is up 6.38% since then through the close on April 19.
Today, May 29, the Biden administration announced an ambitious plan to expand wind farms along the East Coast. The goal would be to see the United States produce 30 gigawatts of offshore wind power by 2030. That’s just a little ambitious since U.S. offshore wind power production right now is 30 megawatts (a gigawatt is 1,000 megawatts) from one wind farm off Rhode Island. Europe, in contrast, already has 24 gigawatts in operation, and the United Kingdom aims to have 40 gigawatts online by 2030Besides generating enough power for 10 million U.S. homes, the plan would cut 78 million metric tons of carbon dioxide emissions.
U.S. banks that pass their next stress tests will be allowed to raise their dividends after June 30, the Federal Reserve said today, March 25. The Fed will also lift any remaining restrictions on stock buybacks.
Hedges that can pay off on the downside and the upside are the most useful and most valuable. They also tend to be relatively rare. There aren’t a lot of these bets floating around in most markets just waiting for you to snap them up. However, I have found two hedges of just this sort in today’s market that I’m going to recommend to you today. (In this post I’m going to give you some of the nitty gritty numbers that support my recommendation for these two hedges. If you want to see some charts for copper and gold, banks and bonds check out the video I posted today.) I’m going to add these new recommendations to my standing Special Reports post tomorrow.
2021 is shaping up as an especially challenging year for investors. Much, much more challenging than 2020. I don’t think we can count on this rally running uninterrupted through the year. That would be simple, wouldn’t it? We’d all know how to profit from that scenario. And I don’t think the market is about to drop off a cliff from its current record highs. That would be traumatic. But, still, we do know how to protect a portfolio in that scenario. And even how to profit from a prolonged plunge–if we can bring ourselves to place those short and Put Options bets. Instead 2021 is likely to be one of those years with a Rally Stage and then a correction (or “something”) to be followed by a last quarter of 2021 that is, at this moment, close to completely unpredictable. That would make 2021 one of those years that gives investors a chance to be wrong several times over, to botch timing on the upside and the downside, and to let emotions power some really bad investment moves. I don’t pretend that I’ve got this year’s market stages down perfectly–although I think the outlines for the first two stages for 2021 are pretty clear. I don’t imagine that I’ve got the timing for navigating these stages clocked perfectly–although I do think I understand “generally” when the market is likely to switch gears. And that lets me lay out for you a likely pattern for 2021 and to suggest stocks and ETFs to use to navigate this year. Part of the point in getting as specific as I can at this point isn’t that I expect that I’ve got everything right, but to lay out concrete markers that will let you and me adjust portfolios as the year progresses. I’m dividing this Special Report into three parts.
It’s unusual, to say the least, to have a dividend portfolio match the returns on the Standard & Poor’s 500–especially in a year when the S&P 500 was setting an all time high–but that’s what happened in 2020. My Dividend Portfolio showed a price gain of 12.28% for 2020. Add in the 3.43% dividend yield and the total return for the portfolio for the year was 15.71.% For the year the S&P 500 returned 16% and the Dow Jones Industrial Average returned 7%.
Nothing like a little $125 million investment from an outside party to validate a joint venture. Fluence, a global battery storage joint venture of Siemens (SIEGY) and AES (AES), has reached an agreement with the sovereign wealth fund of Qatar for a $125 million investment. The funding will give the Qatar Investment Authority a 12% stake in Fluence and values the battery company at more than $1 billion.
Dividend Stock Portfolio member CVS Health (CVS) has set December 21 for the start of its program to vaccinate residents of long-term care facilities with the Pfizer (PFE) vaccine expected to be approved today for emergency use.
Dow (DOW) certainly fits the dividend template that I’ve explained in my Special Report: “10 Dividend Stocks that are beating the risky rockets. The stock yields 5.26% after a 0.20% gain today December 9. That compares to a yield of just 2.8% in July 2017 and 3.1% in December 2016. The stock also shows a 1.06% price to sales ratio on today. I think we’re looking at a cheap stock. Tomorrow I’l be adding it to my Dividend Portfolio.
I’m adding Citigroup, the most recent pick in my Dividend Stocks Special Report, to my Dividend Portfolio tomorrow