Updated: Dec 4, 2018
We are not going to sugar coat it. Stock market performance in the fourth quarter has been beyond dismal. The vast majority of the S&P 500 is in correction territory, many sectors of the market like biotech are deep in bear markets. Oil and other commodities have been absolutely hammered by worries about slowing global growth. Even all the so call FAANG stocks are down at least 20% from recent highs.
Equities could not even bring good tidings this holiday weekend as stocks had their worst Thanksgiving performance wise since 2011 when everyone was worried about the Greek debt crisis. The major indices all dropped approximately four percent last week.
However, beyond the gloom and doom of the headlines, there are reasons for optimism. The economy remains strong with GDP growing consistently above three percent for the full year, which is the first time that has happened since 2005. Unemployment is at 50-year lows and business, as well as consumer confidence, remain at elevated levels. Wage growth is rising at the best rate in a decade.
More importantly, the market is cheaper than it has been in some years. The S&P 500 began the year selling for 18.2 times forward earnings projections. Thanks to the recent decline in equities as well as the robust profit growth we have seen throughout 2018, this index is now selling for approximately 15 times forward earnings. With the 10 Year Treasury yield near three percent and with profits expected to rise in the mid to high single-digit basis in 2019, equities appear oversold at current levels.
At the Insiders Forum, we have watched our model portfolio of 25 attractively priced small and midcap stocks insiders are buying fall like the rest of the market. Very few salmon are successfully swimming upstream in this fourth quarter torrent. However, we continue to outperform our benchmark, The Russell 2000 quite handily.
Since its launch on June 30, 2016, the Insiders Forum model portfolio has delivered an overall return of 57.61%. Putting the same funds into the Russell 2000 would have yielded a return of just 22.69%. This is a difference of nearly 3500 basis points in the 29 months of the portfolio’s existence.
Better yet, given the recent downturn in the market, our portfolio consists largely of very cheap stocks insiders are buying for their own accounts. When market sentiment improves, we are confident our portfolio will rebound quickly with it.
We think our performance stands by itself and a subscription is well worth the small investment. However, it is the holidays and we are always looking for a few intrepid investors to join our growing and highly profitable community. So in the holiday spirit, for the first 50 new subscribers, we will provide the following offer to the Insiders Forum
THE NEXT 50 NEW SUBSCRIBERS RECEIVE ACCESS TO PERUSE AND PREVIEW OUR MODEL PORTFOLIO INCLUDING:
- 14-days risk-free trial subscription
- In-depth investment research on all current recommendations
- Full access to past archives
- Ability to participate in our active Live Chat during the trading day
- 20% off the first year of subscription following the free trial period
⬆︎ This special offer is LIMITED TO ONLY the next 50 SUBSCRIBERS that activate an Insiders Forum free trial subscription on a completely no obligation basis.⬇︎