All-Time Highs – Be Careful

An excerpt from the September issue of 2 for 1.

“The major stock market indices, the 2 for 1 Index®, and the 2 for 1 newsletter portfolio have all hit all-time highs repeatedly over the last few months. Every time this happens we congratulate ourselves on how smart we are to be invested in the stock market. I, like everyone else, get a warm fuzzy feeling when the number at the bottom of the column grows to a new, higher level. However, I am also careful to remind myself that our 10.7% annualized growth has not been in a straight line. The dot-com bust and the 2008 financial crisis are sobering examples of the downside of stock market investing. The current bull market is one of the longest in history, and I’m writing today to say with some certainty, something bad is going to happen and the bull market will eventually come to an end.”
“I would be foolish to predict the timing of the onset of the next bear market and, because of the fully invested nature of the 2 for 1 strategy, I’m not planning any changes in 2 for 1’s monthly buy/sell routine. However, I would be remiss, as your newsletter editor, if I didn’t remind my readers that 2 for 1 only concerns the equity portion your portfolio. Everyone’s financial situation differs and asset allocations will vary accordingly but, with emotions and market uncertainty being pumped up by the coming election, I recommend a review of your overall financial situation. This review should be bracketed by the assumption that your stocks may be taking a hit over the coming months.

2 for 1 doing 24% 0ver the Market YTD

2 for 1 is up 4.75% for the YTD vs. 3.84% for the S&P 500 Total Return Index. Results since inception (7/31/1996) look even more impressive.

TOFR meeting graph

Five stock split announcements in May

zipperThe month of May has produced an El Nino of stock split announcements to break the recent prolonged drought. For the first four months of 2016 there had been only three 2 for 1 split announcements. The last time there were five or more in one month was May of 2015. After analysis and ranking, one of these five will be added to the 2 for 1 Index® and purchased for the 2 for 1® model portfolio.

Company                    Symbol       Ratio     Payable    Announced

Brown-Forman Corp BFA & BFB   2 for 1   08/08/16   05/26/16
Core-Mark Holding Co.   CORE    2 for 1   06/27/16   05/26/16
SS&C Tech Holdings       SSNC    2 for 1   06/24/16   05/25/16
Ebix Inc.                           EBIX     3 for 1   07/15/16   05/23/16
VSE Corp.                       VSEC    2 for 1   08/08/16   05/04/16

Another 3 for 1 split for Ebix

Ebix LogoEbix Inc. just announced its third 3 for 1 split since 2008. It was a 2 for 1® stock from 2010 to mid-2012. We’ll be analyzing Ebix to determine its suitability for a return to the 2 for 1 Index.

Home BancShares splits AGAIN

HOMBHome BancShares (HOMB) announced another 2 for 1 split on Thursday. HOMB returned 80% in its 32 months in the 2 for 1 Index® and was just removed from the Index this January. HOMB will be analyzed carefully over the coming months to determine if it will be re-introduced into the 2 for 1 Index for a second go-round.

FINALLY – A 2 for 1 Split Announcement as the 2 for 1 Index® hits a new all-time high

zipperAs the 2 for 1 Index® hits a new intraday high of 955.59, Alliant Energy (LNT), a gas and electric utility in Wisconsin, announced a 2 for 1 split on 4/20/16 to be paid on 5/19. This split announcement is only the second 2 for 1 split this year, and comes only after the very small bank, Greene County Bancorp (GCBC) announced back on 2/17.