Q. Professor, how important is the DOW hitting 20,000?
A. First, I do not want to minimize the DOW Industrials run to 20,000. I like the increased value of parts of my portfolios but realize I have not made one penny unless I sell and close the trade.
With all the media cheerleading, I would be surprised if the DOW does not hit 20,000 by the second week of January, if not before. Keep in mind; the DOW Industrials have thirty stocks and in no way represent the strength or weakness of the entire US stock market.
To hear a recent interview where I discuss the DOW 20,000 and my 2017 predictions, click here.
When measuring the value of the market, I use the S&P 500. To make my point, while the DOW Industrials and NASDAQ are making new all-time (nominal) highs, let’s view a Performance chart of the nine sectors going back three months. Why three months? To see that even with the post-election rally, five of the nine sectors are still in negative territory.
To see the charts I discuss in the full interview, sign up for my FREE newsletter.
Q. Any Predictions for 2017?
A. I usually do not give predictions but have been asked by some in the media to do so. To keep things simple, I think we will see one pullback of five to six percent and one correction of ten to twelve percent. I would be surprised if one does not happen before April 15, 2017. With these pullbacks, I see tremendous buying opportunities, if and only if buy signals are then triggered.
Q. I heard you discuss your Playbook 2016. What is it?
A. Over the last decade, I have developed my proprietary Playbook of securities, listed by groups. Every quarter, I publish a High-Dividend Fund Report that consists of eighty-four funds into 13 groups. This is a list I, and my Academy Members, use to choose investment candidates.
As a trader, investor and educator, I feel my work should be held to a higher standard. For example, I had my 2016 Q4 High-Dividend Report audited to see if any of my eighty-four fund candidates outperformed the S&P 500. If none of my proprietary funds can outperform the market, then I need to refund my member's subscriptions and pump gas at the local station.
The audit showed 71% or fifty-nine of my eighty-four funds outperformed the S&P 500. These stellar results speak for themselves. I use performance charts from Stockcharts.com to compare the top five funds’ performance (of each of the thirteen groups) against the SPX performance. This gives a visual of how well each of my funds is performing. No smoke or mirrors whatsoever.
Click here to see a sample of the 2016 Q4 High-Dividend Fund Report.
Q. Final Question, what will 2017 bring?
A. That one is easy, 2017 will be what we make it.
For those who have sent questions, I will begin answering them beginning the week of January 2, 2017. Send your questions to eyeonthemarket@outlook.com. If selected, you will receive two weeks of my daily posts-on me!
David O. England
Davidoengland.com
