It ever bothers maine however often you spot pundits recommending this and that bargain arsenic a definite happening without immoderate accusation astir however their past picks person performed. So it seems lone close that I should springiness those of you who travel my writings an update connected however the proposal I person fixed implicit this past twelvemonth has held up. Note that each statistic successful this nonfiction are fixed arsenic of December 28, 2022, which is erstwhile I researched and wrote this article.
If you click connected my Seeking Alpha Profile you tin spot however the stocks and ETFs I person covered person performed aft I wrote astir them. This is useful. Unfortunately, it does not bespeak the nuance that my articles often describe. Seeking Alpha, successful enactment with astir concern services, requires that I take "Buy," "Hold," and "Sell" for immoderate main ticker I constitute about. But these ratings bash not bespeak the existent proposal I person given.
That's due to the fact that I often constitute astir investments that I deliberation are overvalued astatine the clip I americium writing, but that would beryllium large buys were their prices to conscionable definite criteria I laic retired successful the article. My feelings astir those investments are don't merchantability but support an oculus retired to bargain if the investment's terms corrects to immoderate stated target.
I often constitute astir the classical "buy and hold" wide marketplace retirement-oriented investments including the SPDR S&P 500 ETF Trust (SPY), the Vanguard S&P 500 ETF (VOO), oregon the Vanguard Total Stock Market ETF (VTI). My feeling astir those investments is that erstwhile you person bought shares successful them you should ne'er merchantability them until you request the wealth successful retirement. The lone objection to this is if you are investing successful a taxable relationship and person a taxation nonaccomplishment harvesting opportunity. But due to the fact that that is my attitude, I emblem these investments arsenic Holds, adjacent though I expect them to decline, perchance a lot. My reasoning is that history, and my ain acquisition arsenic a naive capitalist trying to clip the market, has been that erstwhile the marketplace turns up aft a diminution it tin bash truthful precise quickly, punishing those who sold retired of ample positions.
That means that I often constitute articles astir SPY, VOO, oregon VTI wherever the full nonfiction makes the constituent that this is not a bully clip to bargain them for reasons fixed successful the article. But if you look astatine the graph that Seeking Alpha provides on with that article, it isn't wide that I warned the scholar astir the coming diminution they tin expect successful that investment's stock price.
Here, for example, is simply a database of the articles I person written astir SPY. As you tin see, each are flagged arsenic holds, but if you work the articles you volition spot that successful astir of these articles, I person pointed retired the important issues with valuation that person resulted successful the show of SPY successful the months aft I wrote astir it. My lone nonfiction recommending that status investors debar SPY wholly was the 1 published successful February that pointed retired that its disbursal ratio was considerably higher than different S&P 500 ETFs. But adjacent determination if an capitalist already owned it, determination was nary crushed to merchantability it but if taxation nonaccomplishment harvesting.
SPY Price, My Hold Recommendations and the Actual Articles
Investors who followed my proposal to clasp their existing concern successful SPY, VOO, VTI, and akin ETFs portion not buying much until their valuations improved, mightiness not person done arsenic good successful the abbreviated word arsenic those who leap successful and retired of these investments. But I judge firmly that they are apt to bash a batch amended implicit clip arsenic it is truthful hard to cognize erstwhile to bargain backmost successful aft selling them.
However, determination was 1 immense objection to this -- an nonfiction that has proven to person deed the nail connected the head. That nonfiction was The Market Has Already Protected You From Inflation With 48% Gains Over 2 Years, Take Profits Now. Investors who took the proposal I gave successful this article, which was published connected December 16, 2021, saved themselves from a satellite of hurt.
VOO History After My One Sell Recommendation
I Only Issued One Buy Recommendation for a Stock
That banal was Snap-on Inc (SNA), a institution that has an enviable semipermanent past of holding up successful bully times and bad.
I recommended it successful this article, which was published connected February 4, 2022. Is Now A Good Time To Invest In Value Stocks? Consider Snap-On And Comcast. That article's lone beardown proposal was to put successful Snap-on. Though Comcast (CMCSA) featured successful the article's title, I gave bully reasons for suggesting that though Comcast looked similar a large worth buy, determination were reasons to beryllium cautious. I concluded "I americium going to beryllium keeping it connected my radar for if the marketplace resumes a downward course, but unless the terms drops further portion its maturation prospects stay unchanged, it is not a screaming buy."
Very fewer Seeking Alpha members saw that nonfiction due to the fact that of the mode that Seeking Alpha lone notifies readers of articles astir stocks that are already successful your portfolio. That's a shame. As you tin see, investors who enactment their wealth into Snap-On did precise well.
Snap-On Performance Since My Buy Recommendation
Comcast, it turned out, saw its terms plummet, with its full instrumentality falling 28.49% since I published that article. For what it is worth, it inactive looks similar it could beryllium a good worth play for those consenting to wait, though I americium not recommending it. If you are interested, hold for its January 2023 net telephone to spot if the net and guardant guidance lucifer what analysts are presently expecting.
My Recommendations for Fixed Income Investments Followed the Ukraine Invasion Black Swan
The Russian penetration of Ukraine began connected February 24, 2022 and is inactive ongoing, much than 10 months later. It has made a immense quality successful the investing climate, ensuring that ostentation would beryllium acold much agelong lasting than primitively believed.
Those who formed scorn connected Federal Reserve Chairman Jerome Powell's June 22, 2021 connection that ostentation was impermanent person to inquire themselves, did they spot this penetration coming? Were they already alert of the immense interaction it would person connected the terms of energy, fertilizer, grain, and each the different products whose proviso lines were analyzable by the request for antiauthoritarian nations to authorisation this transgression land-grab? Don't fto your request to people governmental points unsighted you to conscionable however overmuch that penetration has changed the investing situation -- and whitethorn proceed to impact it passim the adjacent year.
A Winning Recommendation to Income Investors Switch to Fixed Income Investments From Stocks
I issued that proposal successful a tickerless nonfiction published connected September 23, 2022 that has go the astir work of immoderate investing nonfiction I person ever published. That nonfiction was Don't Be A Fool: Pause Stock Purchases And Load Up On Treasuries.
U.S. investors who followed that proposal were capable to fastener down authorities guaranteed CD yields approaching 5% implicit the adjacent month, immoderate extending arsenic agelong arsenic 5 years. Those who invested successful shorter maturities person been capable to instrumentality vantage of rising wealth marketplace money yields. These highly liquid funds that contiguous nary important hazard of mislaid main person seen their yields emergence implicit the past fewer months. Investors present tin get 4.26% successful the Schwab Value Advantage Money Fund Investor Shares (SWVXX).
Yes, the stock prices of dividend stocks and ETFs person risen since I published that article, but that is lone utile to those who merchantability retired astatine what they anticipation is the banal oregon ETF's high. If we person the recession that truthful galore are forecasting this coming twelvemonth and net instrumentality a large hit, the prices of those dividend stocks and ETFs volition fall. Quite a fewer whitethorn chopped oregon intermission dividends, but those CDs and Treasuries you bought successful October and November volition proceed to wage that authorities backed 4+%. And you tin merchantability your wealth marketplace money holdings and usage the main you protected to bargain dividend stocks astatine overmuch amended prices, valuations, and yields.
If yields substance to you, it's worthy noting that though the stock prices of the dividend ETFS person risen since I published that article, their dividends proceed to not beryllium competitory with the champion fixed income offerings.
For example, the Schwab U.S. Dividend Equity ETF (SCHD) presently has a dividend output of lone 3.38%. Even figuring successful the higher taxation complaint connected fixed income you would wage successful a taxable account, investing successful a wealth marketplace money close present you volition inactive travel retired ahead. You could bash adjacent amended if you bargain Treasuries. Today's auction of the 5-year Treasury Note (US5Y) settled astatine 3.973%.
I don't cognize astir you, but if we bash spot a important recession, or, for that matter, if the Fed pauses its complaint increases, you volition beryllium precise blessed to person a wholly harmless output of astir 4% to supply you income, without the worries astir what is happening to the wealth you invested you person to person with stocks successful a recession oregon longer play of stagflation.
I repeated my proposal to put successful fixed income connected November 2, astatine a clip erstwhile investors had convinced themselves that the Fed was going to marque its much-desired Pivot distant from raising rates. That nonfiction was No Pause. Rates Will Keep Going Up: Powell Was Unusually Direct At His Press Conference. That proposal has continued to reward those who followed it.
I Made One Losing Bond-Related Buy Recommendation
On October 28, 2022 I recommended that the Direxion Daily 20+ Year Treasury Bear 3x Shares ETF (TMV) could beryllium a precise profitable concern if the Fed's guidance came successful overmuch higher than what investors were hoping for. It did, but investors continued to clasp connected to their content that the Fed would soon beryllium forced to intermission their complaint increases and perchance adjacent statesman taking enactment to little rates. As a effect this triple leveraged ETF has suffered large losses.
TMV Performance Since My Buy Recommendation
Here again, determination is immoderate nuance successful the nonfiction that isn't captured by the "buy" recommendation. Several times I pointed retired that investing successful a triple leveraged ETF was a gamble. I besides qualified who I thought mightiness payment from buying in, stating,
Investing successful TMV whitethorn look similar an retired and retired gamble, and if you don't clasp bonds oregon CDs, it is ... But investing successful it makes consciousness if you ... person a important holding successful bonds with a longer duration -- similar those held successful BND oregon BIV oregon different longer duration enslaved ETFs similar the iShares Core 10+ Year USD Bond ETF (ILTB) oregon the Vanguard Long-Term Bond ETF (BLV) ... A tiny magnitude [of TMV] tin instrumentality immoderate of the symptom retired of the ongoing interaction of rising involvement rates which arsenic galore investors learned for the archetypal clip this year, tin origin their "safe" enslaved allocation to suffer astir arsenic overmuch arsenic a speculative stock.
Given that longer rates person begun to emergence again, it is imaginable that those who bought TMV mightiness marque up immoderate of their losses implicit the adjacent fewer months if they hold, but it surely did not crook retired to beryllium a profitable concern for those who bought erstwhile I recommended it. I mislaid immoderate wealth successful it too, though I sold retired erstwhile that nonaccomplishment deed my stop.
I Issued 11 Sell Recommendations. How Did They Do?
Recommendations that Paid Off
I already described the usefulness of my merchantability proposal for VOO issued connected December 21, 2021, a twelvemonth ago. Now let's look astatine the rest.
I issued 12 merchantability recommendations, starting with the proposal to merchantability the Vanguard Information Technology ETF (VGT) which I published connected February 23, 2022. That was a bully call. It's down 18.81% since then, astir treble the S&P 500's 10.21% nonaccomplishment since then.
In April, I published an nonfiction advising investors to dump the Vanguard Real Estate ETF (VNQ). That excessively was precise bully advice. It has since achieved a full instrumentality of -22%. Note the minus sign! And that full instrumentality includes the full year's worthy of dividends.
QYLD and RYLD
On April 21 I advised investors to merchantability the Global X NASDAQ 100 Covered Call ETF (NASDAQ:QYLD) and the Global X Russell 2000 Covered Call ETF (RYLD) which were fashionable with income investors astatine the time. Since past QYLD's full instrumentality has been -16.42% (note the minus sign!) which includes its dividends. RYLD's full instrumentality has been -12.58%. In that nonfiction I suggested that if you had to bargain 1 of these. RYLD would beryllium a amended prime but I flagged them some arsenic sells, writing:
Don't fto the precocious distributions fool you. Both QYLD and RYLD springiness dividend investors little instrumentality successful the bully times and tin present stinging losses successful bad. They are some young ETFs that person done decently implicit a abbreviated clip agelong but can't warrant harmless returns for income investors if the bull marketplace stalls oregon ends.
Again, bully advice.
Similarly, investors who heeded my warnings successful an nonfiction published connected May 6, 2022 to merchantability ProShares UltraPro QQQ (NASDAQ:TQQQ) were spared the devastating nonaccomplishment of 53.42% of their investment. No 1 should person needed this warning, fixed the ridiculous overvaluation of the stocks making up fractional of the Invesco QQQ ETF Trust's (QQQ) worth astatine the time, but seemingly immoderate people's greed is greater than their communal sense.
Along the aforesaid lines, successful an article published connected May 31, 2022 I recommended investors merchantability QQQ. Those who did avoided a full instrumentality nonaccomplishment of 14.98%. I issued another merchantability recommendation for QQQ connected September 21, 2022 astir six months aboriginal aft QQQ's stock terms had dropped implicit 20% from its high. Investors who heeded that informing saved themselves from the consequent 9.78% nonaccomplishment suffered by those who held.
Valuation matters -- yet -- and arsenic we tin spot anserine valuations turned retired to substance a lot.
Recommendations That Were Mediocre But Not Bad
On August 4, 2022 I issued a merchantability proposal for the Vanguard Utilities ETF (VPU) arguing that it would not support investors successful an situation of sustained inflation, based connected however they did successful the erstwhile 1970s inflationary period. I besides pointed retired that VPU's output was the lowest it had ever been making it that overmuch little appealing to income investors and suggested lone buying it erstwhile rates roseate to a much competitory level.
Since past VPU's full instrumentality has been a nonaccomplishment of 2.91%, which of people includes its dividends. That was amended than the show of the S&P 500 implicit the aforesaid period, arsenic it dropped 8.61%, but it was inactive a loss.
VPU Performance After My Sell Recommendation
Investors would person done amended to put successful fixed income implicit that aforesaid period. At the clip that nonfiction was published the 2-year Treasury Note was yielding 3.07% and the 5-year treasury was yielding 3.15%. Rising substance costs are taking their toll connected inferior profits. Unless you person a precise debased output connected outgo and important superior gains (as I do) determination was small crushed to hold.
On September 7, 2022 I issued a merchantability proposal for the Vanguard Dividend Appreciation ETF (VIG) successful an nonfiction comparing it with VOO. Since past it has outperformed VOO, arsenic you tin see.
VIG Performance Since My Sell Recommendation
Remember that the S&P 500 alteration is simply a terms alteration that doesn't see its dividend. So yes, implicit the abbreviated word VIG did outperform VOO. As ostentation persists it is apt to suffer its remaining appeal. Why should investors gamble for a 2% output connected their concern erstwhile they could gain 4% oregon much successful a fixed income concern wherever their main is guaranteed?
I Made What Looks Like One Really Bad Stock-Related Recommendation But Nuance Matters
On June 22, 2022 I recommended investors dump the Energy Select Sector SPDR ETF (XLE). Since that clip it has achieved a 21.12% full return. So that looks similar a atrocious call.
There is simply a flimsy betterment if we look astatine what I really wrote successful the article. I did counsel investors "XLE's dividend is not competitory with a tiny holding of idiosyncratic lipid stocks." Further connected successful the summary information of that nonfiction I wrote,
Buy XLE if you privation to marque a short-term speculation connected however the lipid manufacture volition perform. Even there, you mightiness bash amended conscionable buying XOM and CVX straight alternatively than this precise poorly diversified ETF.
As you tin spot from this graph, successful the short-term speculators who took my proposal and sold could person made immoderate money. XLE dropped respective times beneath its terms astatine the clip I issued my recommendation. Obviously those who bought and held person done poorly, though fixed however volatile lipid tin be, they whitethorn marque up their losses adjacent year.
XLE Performance Since My Sell Recommendation
My proposal that investing successful Exxon Mobil (XOM) and Chevron (CVX) alternatively of XLE would beryllium a amended mode to put successful lipid was besides good. As you tin see, some person outperformed XLE since I gave that advice.
Bottom Line: My Advice Was Largely Very Helpful. But You Need to Read the Articles To Fully Profit From It
I americium precise cautious not to contented recommendations that I americium not precise assured about, fixed that I recognize that excessively galore radical put based connected what they spot immoderate pundit counsel without doing their ain research. As a effect I thin to laic retired my reasoning astir wherever I deliberation assorted investments stand, what their valuations look like, however ETFs are constructed, and what they hold, alternatively than contented level retired bargain oregon sells.
I'm gladsome to spot that wherever I person issued recommendations to bargain oregon merchantability my proposal would person helped readers. Only 2 of my recommendations would person led to losses. But it is worthy noting that this would lone person been existent if those who bought oregon sold did truthful without speechmaking the articles that accompanied those recommendations. In those articles I spelled retired successful item who those recommendations were aimed astatine and wherefore those recommendations would marque consciousness for them. Even my worst-looking merchantability recommendation, for XLE, looks a batch much tenable successful presumption of the proposal successful the nonfiction to put successful a fewer lipid stocks alternatively than put successful the assemblage ETF.
If you similar this article, inquire your favourite authors to supply immoderate item connected however their recommendations person played out. We tin each larn from this exercise.
Here's wishing each my readers a Happy New Year and safe, comfortably-held investments for 2023.
This nonfiction was written by
Though I person done rather a fewer antithetic things implicit the people of a agelong life, I americium champion known arsenic a writer of bestselling books astir concern and health. My occurrence has travel due to the fact that I americium a precise funny idiosyncratic who doesn't conscionable travel the herd and spot immoderate the experts archer america to believe. I bash my ain research. I cod the facts, look astatine them objectively, and gully my ain conclusions. Over the years, I person been amazed astatine however overmuch of what everybody "knows to beryllium true" is based connected poorly designed studies, galore of them intolerable to replicate. I attack Investing with the aforesaid unfastened mind, challenging the orthodoxies that pull the herd, studying however things truly work, and doing my champion to travel up with an approach, based connected facts, that works for maine and would entreaty to those who find reasoning worthwhile. Lately I person been investigating however the indexes that underlie ETFs are constructed and uncovering retired successful the process that the mode these indexes are acceptable up guarantees that galore of the ETFs radical bargain are not truly doing what their titles suggest they do. I americium besides doing my best, successful the existent precise challenging environment, to find comparatively harmless ways to deploy the wealth I usage to make income, wealth that I would usually enactment into CDs. I usage valuation concepts and a wide sprinkling of communal consciousness to find stocks that I judge volition not lone nutrient humble amounts of income, but besides turn their stock terms implicit the adjacent 5 years.
Disclosure: I/we person a beneficial agelong presumption successful the shares of VOO, VTI, SCHD,,US5Y,VPU either done banal ownership, options, oregon different derivatives. I wrote this nonfiction myself, and it expresses my ain opinions. I americium not receiving compensation for it (other than from Seeking Alpha). I person nary concern narration with immoderate institution whose banal is mentioned successful this article.
Additional disclosure: I americium not a registered concern advisor. I americium conscionable an mean capitalist with a batch of curiosity who enjoys researching stocks and sharing what I find with others. Don't bargain oregon merchantability immoderate information you work astir present earlier doing your ain probe and considering opposing views.