This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Emerging market stocks may have bottomed out

By Charles Sizemore

The bull lives. This year has gotten off to a rocky start due to a combination of lackluster American economic data and, more significantly, emerging market volatility. But after bottoming in early February, the S&P 500 Index (SPX) has clawed back to its all-time highs.

Emerging markets equities have rebounded as well; the iShares Emerging Markets ETF (EEM) has roughly tracked the S&P 500 after bottoming out in early February. European shares, measured by the iShares Europe ETF (IEV) continue to outperform both U.S. and emerging market equities.

Through February 28, my Tactical ETF portfolio is pacing the S&P 500. The aggressive allocation to mortgage REITs has been one of the the best-performing portfolio position, followed by our allocation to Spanish equities.

The gains have been roughly neutralized by weak performance in Chinese stocks, where the portfolio is overweight. I continue to expect Chinese equities to outperform this year, but they are getting off to a slow start, along with most emerging market indices.

My Dividend Growth portfolio is off to a solid start this year, up 4.4% vs. 1.0% for the S&P 500 through February 28. As bond yields have moderated, yield-sensitive investments have enjoyed a nice rebound.

In a prolonged period of lower-than-usual market yields, I expect the Dividend Growth's strategy of combining a high current yield with expected growth in the dividend payout to be a strong performer. Within this sphere, I see the best values among conservative retail and industrial REITs, and I expect this subsector to be a major focus throughout 2014, market conditions warranting.

I also made one significant change to my Strategic Growth Allocation. I reduced my allocation to the Vanguard Dividend Appreciation ETF (VIG) and added a new allocation to the Cambria Shareholder Yield ETF (SYLD).

While I am still a big believer in VIG's long-term strategy of investing in companies with a history of raising their dividend payouts, I consider SYLD's approach of combining dividend growth with share repurchases to be a worthwhile enhancement.

I seldom make changes to the Strategic Growth Allocation, as it is designed to be a passive "buy and hold" allocation. But I consider SYLD's approach to be an enhancement that was significant enough to warrant a portfolio shakeup.

Meanwhile, I continue to maintain an overall bullish stance. Consistent with my comments of recent months, I intend to maintain an overweighted allocation to income and emerging market stocks and to European stocks.

DISCLAIMER: The investments discussed are held in client accounts as of February 28, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable. Past performance is no guarantee of future results.

Charles Sizemore

Charles Sizemore

Sizemore Capital Management LLC is a registered investment advisory firm located in Dallas, Texas. Charles Lewis Sizemore, CFA is the

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%
YHOO $36.60 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs