Wednesday, October 21, 2015

Outlook for October 2015

Its the official start of the fall season and the market dynamics are in full swing. We have started seeing some wild gyrations in all the markets – stock, bond, commodities and forex markets. The prime focus is of course on whether the US Fed will raise the rates this year. The Fed passed on the opportunity to raise rates in September and have kicked the can down the road – which the market did not take well. The bond market is pricing-in the probability of an increase in interest rates up in the low-to-mid-40% range for December of 2015 (by 25 basis points). It is important to keep in mind that the Fed still sees deflationary pressures everywhere in the market causing them to stumble in their path to higher rates. Whether the Fed will do it or not remains to be seen. No move is expected in October.


On the Canadian front, the focus on the federal election (on Oct 19) is heating up. The central bank is not making any moves at the moment and taking a wait-and-see approach after two cuts in interest rates so far this year.

Outlook for October 2015

In February, we started putting together an index-based ETF portfolio for my wife’s portfolio. In order to avoid buying at a market top, we started off with a modest amount of funds put to work. We will continue building our position over the course of the year. The portfolio details are shared here. As for my portfolio, I hold a decent amount of cash as discussed in my 2015 goals post. I am well above the 3-5% of cash position target to take advantage of market corrections.

Portfolio Considerations

I’ve made plenty of new purchases over the course of summer and am spread thin. For the remainder of the year, I intend to add and build on the existing positions instead of adding new names (unless something un-passable comes up). A lot of the companies are attractively priced and the following table details my portfolio holdings and some metrics associated.

Dividend Increases

I am expecting dividend increase announcements from the following companies in my portfolio.
  • Amgen Inc (AMGN) – last increase was 30% in October 2014
  • Kinder Morgan Inc (KMI) – last increase was 2.08% in July 2015
  • Omega Healthcare Investors Inc (OHI) – last increase was 1.85% in July 2015
  • Starbucks Corp (SBUX) – last increase was 23% in October 2014
What are your thoughts on the stocks mentioned here? Do you own them or are they on your watchlist? What do you think of the current market levels and buying here? Make sure to leave a comment below as I value reading your questions and comments.


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