Commentary for the week ending 07/17/2021

I am so glad that those poor families making only $150,000/year are receiving their first childcare credits!  Another example of government largesse gone wild.  Despite the paradoxical drop in bond prices, I think we are on the road to inflation, or maybe, as a Barron’s commentary said this weekend, the “stagflation” of the 1970’s.  “Stagflation”, for those you unfamiliar with the term, is inflation without growth. 


So, what actions should you take?  As is often the case, if you are adequately diversified, probably doing nothing is best at this point.  The market will eventually sort things out, but it will take time. 


On the growth fund, I am very concerned about the Chinese stocks in the portfolio.  I hope that you took some profits in BABA and VIPS before the recent difficulties.  I cannot see an immediate rise in these securities, but I still think that the Chinese government will realize that their restrictive policies will prove to be counterproductive.  So, any investment in these stocks is very speculative – you must be prepared for continued losses, but gains may still be around the corner.


As for the other 18 stocks in the Growth Portfolio, I am not that concerned.  Hang in there and you will be rewarded.  And take some profits in the outside gainers if you are need of cash for diversification.


On the Income fund, it is doing its job – so sit back and collect your dividends.  Do not worry about market fluctuations.  If you are reinvesting dividends and the stock has dropped, you can buy more shares.  This has proven very lucrative for me, especially in stocks like Phillip Morris, Exxon and others.  I am now collecting the rewards of this strategy and encourage you to do the same.


Well, that is about all for now.  Please feel free to comment or contact me directly.

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