Download 18 November - MoneyLetter

Welcome to the MONEYLETTER Hotline for Wednesday, November 18, 2015
U.S. stocks rose today – for only the third time in the last 11 sessions – helped
by the minutes from the Federal Reserve’s October meeting which indicated that any
interest rate increases will be gradual as the economy slowly improves. The market
may be looking ahead to 2016, as it seems to have absorbed the concept of higher
rates and some recent soft economic reports.
After a strong rebound in October, the S&P 500 had trimmed 2.8% since Fed
Chair Janet Yellen said a rate hike was a “live possibility” on November 4th. The threat
of tighter monetary policy, coupled with slowing in China and a continuing decline in
commodities prices, kept pressure on domestic stocks. But even though the minutes
show the Fed feels “it may well be appropriate” to liftoff in December, statements this
week by Committee members reminded investors that a shallow trajectory is highly
likely.
T. Rowe Price held their annual year-end press conference today, and their top
investment professionals were relatively positive in their outlook for 2016. They look
for moderately faster growth and benign inflation here in the US, with highly
accommodative monetary policy continuing across most advanced economies.
There is no change to your current asset allocations and no changes to the
Moneyletter model portfolios. There was one trade recommended for the model
portfolios last week: We sold Vanguard Mid-Cap Growth Investor (ticker: VMGRX) in
the Vanguard Conservative, Moderate and Venturesome portfolios. In all three cases,
the replacement fund was Vanguard Mega Cap Growth ETF (MGK). If you have a
403(b) account at Vanguard, the alternate choice is Vanguard Growth Index (VIGRX).
New Fund Changes – For domestic stock funds, there are four new Buys this
week: Pin Oak Equity (POGSX), GAMCO Growth AAA (GABGX), Fidelity Growth
Company (the fund is closed, FDGRX) and Conestoga Small Cap Investors (CCASX).
There are no new Holds or Sells this week.
For international stock funds, there is one new Buy this week: iShare MSCI
Japan (EWJ). There are no new Holds or Sells this week.
Thank you for calling the MONEYLETTER Hotline. The Hotline will next be
updated on Wednesday, November 25th, 2015 at 7pm.