by: Bryan Perry
Sometimes I just get sick and tired of hearing about “the market” even though I’m credited as being a “market analyst” in the financial publishing business.
Actually, my role at Eagle Financial Publications is to be an investment newsletter editor who recommends what to buy and sell. Breaking out certain sectors that feature specific stocks enjoying extraordinary business conditions is the most gratifying feeling a stock picker like me can experience.
Really great stocks do not depend on how the market is trading because they can attract buyers regardless of what the broad market is doing. Just look at the present. The market can’t really get out of its own way because it is weighed down by the industrial, health care, retail, financial and materials sectors, as well as a plethora of other downtrodden subsectors beset by adverse business conditions that are pressuring sales and profit margins.
On the flip side, investments targeted in the information technology, professional services, e-commerce, digital media, chemicals and leisure and entertainment areas are showing that there are sweet spots in the market, providing excellent total returns while meeting my one-year objectives for them.
Yes, there is always a bull market somewhere. My challenge is just to identify those sweet spots and then act on solid research and instinctive timing to buy each strategy appropriately.
I love the challenge of trying to find those high-paying securities that I can recommend with an equally high level of confidence. After 30 years of managing other people’s money and conducting due diligence on high-yield assets, it gives me great satisfaction to craft a portfolio that will endure the most insecure of times, such as the present. I also want a juicy and reliable level of cash flow during these times, with a chance of heightened gains when investor psychology improves.
Of late, there is rising investor conviction in the business-to-business private lending market as small- to medium-sized business are accessing readily available capital to rapidly expand their businesses. There is an appetite to invest in companies that originate commercial real estate loans with variable interest rates. I also am seeing a growing interest in the renewable energy and export markets for liquefied natural gas (LNG) shipments. Add to that mix real estate investment trusts (REITs) that target cloud data centers and hotel resort/gaming properties.
These and other spaces within the high-yield universe are where income investors can generate current yields of 6-13%, depending on the specific asset. It is safe to say that the opportunities to find outsized yields in an investing landscape where interest rates are ticking higher and capital is rotating into more economically sensitive sectors remain available. My high-yield investment newsletter, Cash Machine, is all about putting my three decades of investing experience and application of asset management skills to work for the benefit of the investor who wants to direct his or her own income portfolio.
To that end, as 2016 starts to wind down and the New Year approaches, there surely will be substantial changes in a number of areas after the elections, and that will have both favorable and unfavorable implications for certain asset classes. I would highly recommend that anyone who is serious about staying ahead of the curve regarding Fed policy, taxes, regulations, foreign exchange volatility and commodity risk should consider having a couple of weekly advisories to help filter and ferret out the best income strategies ‘the market’ has to offer. Click here to learn how Cash Machine can help you.
In case you missed it, I encourage you to read my e-letter column from last week about how recent sector rotation marks a change in investor sentiment.