{"id":33305,"date":"2012-11-02T07:34:05","date_gmt":"2012-11-02T11:34:05","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/11\/after-sandy-now-what\/"},"modified":"2012-11-02T07:34:05","modified_gmt":"2012-11-02T11:34:05","slug":"after-sandy-now-what","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/11\/02\/after-sandy-now-what\/","title":{"rendered":"After Sandy: Now What?"},"content":{"rendered":"

By The Sizemore Letter<\/a><\/p>\n

In the first day of trading after Hurricane Sandy pounded New York, the S&P 500 had its best trading day in seven weeks.<\/p>\n

I\u2019m not one to assign a lot of significance to a single day\u2019s trading, but I did find it encouraging.\u00a0 It suggests that the damage left behind was less severe than the Street feared.\u00a0 Life is already returning to normal in Manhattan, and power and transport are being restored bit by bit.\u00a0 The damage tally will not <\/em>be small, and the disruption will likely take a bite out of 4th<\/sup> quarter GDP.\u00a0 But the rebuilding efforts should create a nice jolt in economic activity leading into the new year.<\/p>\n

Stocks have been stuck in a sideways pattern for the better part of the past two months, as a string of disappointing earnings releases and economic data kept a lid on investor enthusiasm.\u00a0 But with the bad news now mostly digested\u2014and with the Fed, the ECB and the rest of the world\u2019s major central banks still maintaining the loosest collective monetary policy in history\u2014I expect the animal spirits to return for the last two months of the year.<\/p>\n

Sizemore Capital has been pleased with the performance of our Dividend Growth<\/a><\/strong> and Sizemore Investment Letter<\/a><\/strong> models at Covestor.\u00a0 Both are beating the S&P 500 for the year without taking significantly more risk.\u00a0 In a year like 2012, when so much is determined by macro and political risks outside of the control of company managements, an income-focused strategy is the only strategy that makes sense.<\/p>\n

Within the Dividend Growth portfolio, we are focusing most heavily on mid-stream oil and gas partnerships and conservative triple-net retail REITS.\u00a0 In our view, these sectors are attractively priced and throw off healthy amounts of cash.\u00a0 These are investments we would be happy to hold for the next 1-5 years, come bull or bear market. Given the current pricing of bonds and other mainstream income investments, we expect these investments to outperform by a wide margin with very little risk of principal loss.\u00a0 In many cases, dividend yields are well in excess of 5%\u2014not a bad income return in a low-yield environment.<\/p>\n

The Sizemore Investment Letter portfolio is slightly more speculative and is not limited to a pure income focus (strong dividend growth is one of many investment criteria covered).\u00a0 In this portfolio, we see the greatest opportunities in European blue chips with substantial operations in emerging markets.\u00a0 As the European Union slowly congeals into a more \u201cAmerican\u201d style federal system, we see investor risk appetites for European stocks returning.\u00a0 And in the meantime, we get access to high emerging-market growth rates and a steady stream of dividends.<\/p>\n

You can view our Covestor profile here<\/a><\/strong>.<\/p>\n

The post After Sandy: Now What?<\/a> appeared first on Sizemore Insights<\/a>.<\/p>\n

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