PSSST… and your MCIM managed income portfolio could be at an All Time Market Value High.
by Steve SelengutMr. Selengut is a regular contributor to LIFE&Health Advisor and L&HA e-newsLink. He is an investment advisor and the author of ‘The Brainwashing of the American Investor: The Book that Wall Street Does Not Want You to Read.’ You can contact him at [email protected].
Issue Breadth Statistics are the single most reliable indicator of what is going on in the stock market — daily, monthly, annually, whatever. Clearly, if more issues are going up in price more often than down, most of the time, for a meaningful period of time, so should the Equity Bucket of the investment portfolio. Historically, NYSE Issue Breadth (History) have never been individual-equity-only statistics, and today, they count more derivative “products” than anything else.
IGVSI “breadth statistics” signal changes in direction within the Investment Grade Value Stock universe alone — all CEFs, ETFs, REITs, and preferreds (and individual issues that are NOT investment grade) are excluded.Current IGVSI Issue Breadth Statistics allow MCIM investors to look inside our index to obtain a better feel for what has been going on.
Cumulative issue breadth figures were negative from June ’07 through February ’10 — roughly thirty-three months, and a longer than usual correction. In March ’09, we soared into the black and the up trend continued through January 2012 — perhaps the best two years in a row ever!
But 2011 was only about half as strong from an “issue breadth” perspective as the previous two years, and since a strong January, issue breadth numbers weakened through mid-June 2012, when most equities rebounded strongly from a six-week train wreck in the energy and related sectors.
From an issue breadth standpoint, the rally has been weakening since April. Up days and down days are equal, and trading io net negative by a slim margin. At the same time, Income CEFs pushed further into All Time High (ATH) territory. Study the WCMSM line here.
However, as a cautionary note, issue breadth has been slightly negative over the past six months — signaling some confusion, if not the weakening of the rally.
If your portfolios (both equity and income) are not well above financial crisis lows (March ’09), perhaps you should try an old approach — MCIM portfolios have most likely been outperforming MPT portfolios for over forty years.
What does all this mean? See my Investment Grade Value Stock Expectation Analyzer here.