We wrapped up last month’s edition of the MPG Core Tactical Portfolio series by saying that oil prices could continue dropping to even under $50 per barrel. We’re not in the business of peering into a crystal ball and prognosticating, however this “prediction” was mentioned simply due to all the noise surrounding oil and its dramatic plunge. A multitude of experts began making statements that oil prices “are very near if not already at a bottom”. Mind you, this was just last month when oil finally dipped under $65 per barrel. The problem with these “experts” predicting bottoms (or anything for that matter)…is that not a single one knew that oil was near a top back in June or that it would fall as fast as it has. As of this writing oil has dipped again and now sits just under $45 per barrel!

 

What does about a 60% haircut in oil prices mean to the stock market? Simply put, the bulls believe that it is a positive for economic growth and is basically like a huge tax cut for consumers and therefore acts much like fiscal stimulus. The bears will opine that falling oil prices mean that the risks of global deflation are real and that the “kick the can down the road” mentality of a market that has been propped up for over five years is about to come to an ugly end.

Before we tell you where which camp we think is right let’s first wrap up our year-end summary on all of the MPG Core Tactical 60/40 positions:

Here’s the current summary of the MPG Core Tactical 60/40 portfolio mix, which is updated as of this writing (January 2, 2015).

Click here to compare our portfolio against the benchmark

What adjustments did we make?

The following moves were made during the month of December:

12/31/14:     Sold 373 shares of Direxion Indexed Managed Futures Strategy (DXMIX) @ $42.95 (~$16k worth).

12/31/14:     Bought 372 shares of ConocoPhillips (COP) @ $69.50 (~$26k total).

The trades we made just two weeks ago are

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Are you scared of flying? Even if you’re a seasoned traveler and airplane turbulence never fazes you, there are certain flights that would get your attention. If the stock market behavior in October was an airplane flight you undoubtedly survived a violent voyage. It would make the month of November seem like the smoothest flight ever, although anyone in their right mind didn’t trust in a safe landing until the wheels actually touched the runway.

After October brought triple-digit moves for the Dow Jones in 16 of the 23 trading sessions, we only experienced one such day in the entire month of November. Even though the Fed announced the end of its bond-buying program, the markets yawned and continued to stretch out to new highs. Small caps were also on a tear for about six straight weeks until literally the last trading day of November and they ended up sputtering in for a negative month.

Another developing story that most sectors of the market have shrugged off is the huge plunge in oil prices. The largest monthly percentage drop in West Texas Intermediate (WTI) crude oil occurred in November. Trading lower than $65 per barrel, crude oil has not seen this long of a losing streak (five straight months down) since the sky was falling back in 2008. We’ll touch more on this in our closing section but prices could fall even into the $45-$50 range which would obviously cause continued mayhem for energy and oil stocks.

Here’s the current summary of the MPG Core Tactical 60/40 portfolio mix, which is updated as of this writing (December 1, 2014).

Click here to compare our portfolio against the benchmark.

What adjustments did we make?

The following moves were made during the month of November:

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As a firm we have always taken pride in the fact that we give back not only monetarily but more importantly with our time and energy. We prefer to roll our sleeves up and get our hands dirty rather than simply writing a check and walking away. Last year we decided to take our game to a new level – we created a team of individuals to raise funds and awareness for charities and compete in Ironman Arizona (2.4 mile swim, 112 mile bike ride and then a 26.2 mile marathon run – that is 140.6 miles, all in one day!). Sure, there are plenty of financial firms that support some very impressive foundations but how many put their time, money and actual bodies on the line?

TeamMPG

Our journey began the weekend of November 17, 2013 as Team My Portfolio Guide (Team MPG) gathered in Tempe, AZ. We volunteered at an aid station helping athletes as they completed the biking portion of their 140.6 mile race. After that day each member of Team MPG began training and raising funds for a charity of their choice. The amount of hours spent in training are enormous but what carries even more of an impact is the story behind each athlete and the impact that these charities have made in both their individual and family’s lives!

After our team completes Ironman Arizona on November 16th we will be presenting the following charities with the funds we have raised to help them with their mission statements:

camp hopeCamp Hope – One of our team members lost his sister in a tragic car accident in 2009. His 6 year-old niece attended this camp and this amazing group allowed her to realize she wasn’t alone as she grieved the loss of her mother. The camp focuses on children, ages 6 – 17, who have experienced the loss of a significant loved one.

Cancer SocietyAmerican Cancer Society – After competing at the highest levels in college one of our members found himself faced with questions regarding his own health and future. Sitting in a cancer center and fighting back tears as he looked into the eyes of his family he realized he wanted to make a difference. This charity hits home for us as well since we’ve lost several clients to cancer.

Prader-williPrader-Willi Syndrome Association – This team member’s 14 year-old niece battles this disease every day of her life. Imagine your body always feeling as though it was starving even if you had just eaten! This association is looking for ways to “Stop The Hunger” and advance research in this chromosome disorder.

pheoparaPheoParaTroopers Foundation – Over the last several years this team member’s entire family has felt the impact of a genetic condition that causes tumors to aggressively grow. His brother and sister have both been diagnosed with this condition and have had numerous surgeries and procedures. This group supports in the research and raising awareness for this condition.

CAFChallenged Athletes Foundation – triathlons are often viewed as a ‘selfish sport’, often associated with a mindset of me, myself and I! This team member is supporting a group that allows people with physical disabilities to pursue an active lifestyle through physical fitness and competitive athletics.

red crossThe American Red Cross – This team member has supported the Red Cross efforts for years. This amazing group not only offers domestic relief but also focuses on five other areas: service for the needy, support for the military and their families, collection and distribution of blood products, educational programs and international relief/development programs.

HoneybonesHoneybones – Imagine being an active 33 year-old and facing a battle with cancer and being told you need hip replacement surgery? This team member brings an international element to our team as he is from England and recently completed Ironman Sweden! He created and helps lead this foundation that focuses on joint and bone related issues.

NationalFallenFirefightersNational Fallen Firefighters Foundation – Our team member supporting this foundation already had a full plate with becoming a brand new father along with balancing a demanding schedule of being a firefighter for the city of Huntington Beach and his wife being an emergency room nurse. He has seen firsthand what it’s like to lose a co-worker and friend in the line of duty so supporting a foundation like this was a natural calling.

AdamBrownAdam Brown Legacy Fund – This team member is now a policeman in Orange County but prior to his career in law enforcement he was a US Navy SEAL. For those of you that don’t know the story of Adam Brown, he was a member of the elite SEAL Team Six, the counterterrorism unit that killed Osama bin Laden. The Adam Brown Legacy Fund not only supports fallen Navy SEALs but other charities as well.

“Let us not be satisfied with just giving money.  Money is not enough, money can be got, but they need your hearts to love them.  So, spread your love everywhere you go.”  - Mother Teresa

Our fundraising efforts as a team continue up until this Saturday (11/15/2014) as we will be in the water waiting for the shotgun start at 7:00 am in Tempe Town Lake the next morning. We have each created an online website that allows anyone interested to make a secure tax-deductible donation to each athletes charity.

az ironman fbWhile race day is quickly approaching the work and efforts of Team MPG will continue to move forward and make a difference. As a company we support a culture of hard work and determination that are required to not only finish but succeed in an event like an Ironman. If you’re interested in learning more about Team My Portfolio Guide, making a donation, or about any one of the specific charities we support, please contact us via email at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

“Giving is the highest expression of potency. In the very act of giving, I experience my strength, my wealth, my power. This experience of heightened vitality and potency fills me with joy. I experience myself as overflowing, spending, alive, hence as joyous. Giving is more joyous than receiving, not because it is a deprivation, but because in the act of giving lies the expression of my aliveness.” ~ Erich Fromm

 

If you’ve read some of our previous articles about what Mr. Market thinks about with regard to what month it is, you’ll know that he could care less! The market has no idea (or interest) whether it’s in November or March. Unfortunately, we are all inclined to pay attention to the calendar because those that run our 24 hour media/news cycle get paid to make such an imprint on your brain.

 

October is a bad month for the stock market, right?

Wrong!

Again, we’re trained to think so. Sure, October has had some dates to remember… The month is famous for some market crashes like the “The Panic of 1907”, “Black Tuesday” (which kicked off the 1929 crash), and “Black Monday”, October 19, 1987, when the Dow Jones dropped 22% in just one day.

Ironically enough, most bad Octobers have been due to issues that came from September. Two of the three above listed crashes were delayed reactions from catalysts that kicked off in September; which historically actually brings more down markets than does October.

All that being said, we had a wild October with some long lost volatility! After the S&P 500 peaked on September 18th, it was all downhill from there until October 15th. The last two weeks of the month were the strongest since July of 2009. For those with short-term memories, that was right after the sky had fallen and nobody trusted any “bear market rallies”.

This time “it’s different” in that we haven’t seen a meaningful correction in years. The S&P 500 bounced back 7% in two weeks and in case you’re wondering…we’re once again bumping up against “overbought” conditions. This is the type of market that can absolutely make you insane. (more on this thought later…

Here’s the current summary of the MPG Core Tactical 60/40 portfolio mix, which is updated as of this writing (November 3, 2014).

Click here to compare our portfolio against the benchmark.

What adjustments did we make?

The following moves were made during the month of October:

Read more...

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