Quarterly performance update for The BAM Rising Dividends Portfolio is now available. See attached. The BAM Rising Dividends Portfolio Q1 2018
The 2017 end-of-year fact sheet and performance update for The BAM Rising Dividends Portfolio is now available. BAM.RisingDividendsComposite.Dec2017
The 2017 3rd quarter performance report for The BAM Rising Dividends Portfolio is now available. 2017 3rd Quarter Performance
The BAM Rising Dividends Portfolio performance update for Q2 (thru June 30th) is now available. Click here to view the PDF -> BAMRisingDividendsPortfolioQ22017
The BAM Rising Dividends Portfolio Q1 performance and holding update is now available. BAM.RisingDividendsComposite.Mar2017
The BAM Rising Dividends Portfolio celebrates its 10 year anniversary and ends the year on a high note.
The 3rd quarter performance update to the BAM Rising Dividends Portfolio is now available. Please view by clicking below:
Our flagship managed account, the BAM Rising Dividends Portfolio, finished the 1st quarter up roughly .50% (1/2 of 1%). The quarter, marked by major swings in global stocks as unloved energy and commodity sectors rebounded sharply, showcased both turmoil and resilience as relief finally came to the emerging market sector. The BAM Rising Dividends Portfolio finished on a high note as the portfolio rose almost 6% during March; A remarkably unremarkable ending to this year’s first 3 months. See the updated BAM Rising Dividends Portfolio fact sheet, including holdings and performance results by clicking here.
The BAM Rising Dividends Portfolio ended 2015 positive for the year, up 1.05% through December 31st, net of fees. We bested our benchmark, the MSCI All World Index, which fell over 2% for the year. The equity-income focused portfolio has now generated positive returns in 8 out of 9 calendar years since starting the portfolio as a separately managed account for clients in January 2007. For additional information, view the BAM Rising Dividends Portfolio Fact Sheet by clicking here
As a special update to the BAM Rising Dividends Portfolio, I’ve gone ahead and published performance results thru Nov 30th of this year. Performance-wise, the portfolio continues to trend ahead of its benchmark with a year-to-date return of 2.72%. We did remove the Deutsche Bank (DB ticker) ADR (American Depository Receipt) from client portfolios. A full deconstruction of the portfolio’s returns and dividend growth metrics will have to wait until our end of year review. In the meantime and for your viewing pleasure, please see attached: BAM.Composite.PerformanceReporting.Nov302015
Stop by out booth this Saturday at the Ford’s Colony Client Appreciation Day! Hot dogs, drinks, etc will be provided! See you then!
For equity markets, the month of September and 3rd quarter in general felt similar to watching a parade in the midst of one of those humid, thick, southern days where even in the shade, you just can’t get comfortable. Indexes ended the third quarter sharply lower, bringing many benchmark returns YTD to a negative 5 % or more. Yet just as a stronger drop in the markets appeared imminent, equities reversed course with a rally as forceful as the August/September slide. So goes the market. So remains the whipsaw.
Heading into the final days of October, most markets are now positive for the year, with the MSCI World and S&P500 posting returns of 1-2% YTD. The BAM Rising Dividends Portfolio continues to slightly outpace its benchmark (the MSCI World Index); a stubbornly positive trend experienced by clients since last Spring. If we simply hold serve for the remainder of 2015, I expect the portfolio to generate a total return of 3-5% for clients. Currently, that is enough to keep long term returns for the BAM Rising Dividends Portfolio (5 year trailing), ranked in the 90th percentile globally when compared to peers. Yet with October’s steep climb, Q3 results for most portfolios have quickly become “dated” – the BAM Rising Dividends Portfolio no exception. Still, for your viewing pleasure, please see attached. BAM.Composite.PerformanceReporting.Sep302015
As noted in client conversations last Fall, the Federal Reserve’s decision to reduce and ultimately remove quantitative easing (QE) from its playbook would put this market into a grind, one characterized by short term price fluctuations but lacking sincere upward traction. It’s taken awhile – so much so that I had practically given up on the premise. But stock indexes are now roughly where they were a year ago. It appears that a lag impact of QE tapering by the Fed is indeed now being squarely shouldered by equity markets. In hindsight, it’s almost impossible to envision a scenario where the removal of QE by the Fed wouldn’t invoke some sort of upward halt to the market’s trajectory – whatever form and tenure that may be. That is, unless a QE handoff to a sounder, more sustainable corporate earnings growth model was executed literally to perfection. That premise is now being tested.
For equity investors, the S&P 500 has long been viewed as one of the better gauges for U.S. stock performance, with the price-to-earnings (P/E) ratio accepted as a popular valuation metric. This month, as markets have pulled back, the S&P500 traded at roughly 15x forward earnings, comfortably within historic norms. This fact isn’t lost on perma-bulls – those who enthusiastically embrace the notion of a long term positive trend in market prices and expect this market sell-off to be extremely short-lived.
While corporate earnings do trend up over time, investors need not lose sight of their inherent cyclicality. Commodity prices remain a mess. Even gold, on a 4-year display as to what happens when investment hyperbole overrides common sense, has yet to act as a serious buffer for investors. In August, DeBeers, the world’s largest diamond miner, announced additional price cuts of 9%. Oil is skirting $45/barrel. Copper and iron ore prices remain historically depressed. Disinflation in many if not most commodity sectors is in full swing. And with visibly shaken emerging markets including most of South America, the Middle East and China standing as a backdrop, properly framing short-to-mid term investment return expectations will be critical to maintaining one’s sanity.
The punch line here? If we’re looking at a sustained global economic slowdown; one that evolves from its origins in a combination of slowing growth in China, commodity disinflation and the ending of QE here in the U.S., corporations will undoubtably experience slower earnings growth. And depending on the length of time experienced before expected earnings growth reaccelerates, stocks prices should adjust lower from highs experienced early this Summer. How much of an adjustment, as always, remains the wild card. Volatility is unfortunately back. As are lower stock prices. Welcome to the grind.
Burton Baker, CIPM
The BAM Rising Dividends Portfolio