Miners who control costs, even more so than increasing production, are the ones who will do well in this current cycle, especially with China’s expected slowdown. Our favorite of the bunch remains a key Wealth Builders Portfolio member.
Our bullish outlook for the energy and financial sectors support higher buy targets for three of our Wealth Builders. We also swap our lone consumer-discretionary position for a name that offers a better risk-reward proposition.
Although our outlook for oil prices and the US energy patch favors an overweight position in core midstream holdings, nimble investors can generate alpha in upstream names by buying when oil prices retreat to the low end of their range and taking some profits off the table when they recover.
We continue to see new market leaders emerging to carry stocks higher and expect the upside momentum to carry through the year’s end. Expect value stocks to benefit the most, leading us to add a strong value-oriented auto play to the portfolio.
Many investors and the financial media tend to get bogged down by volatility and “noise” in economic data releases. We prefer to look at a handful of big-picture indicators that have stood the test of time. And these indicators point to continued strength in the economy.
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