Why I'm Bullish On Stocks And Steering Clear Of Bonds

By Gerry Sparrow

In 2013 equity markets through the end of September advanced in most parts of the world to finish with an overall gain of over +15% as measured by the Global Dow (GDOW). The equity markets in Europe, Asia, North and South America all finished in the plus column. Right now I prefer to overweight stocks versus bonds.

Looking forward I believe third quarter earnings will be solid and may be a catalyst to move the markets higher before the end of 2013. As long as car buying and home purchases remain strong, the stock market should continue to recover.

My investment approach is to buy companies with consistent earning power, high return-on-equity while employing little or no long-term debt and to purchase at reasonable prices with a high margin of safety. I have a system that filters thousands of stocks on a weekly basis using the Sparrow 75-point checklist that screens the highest quality companies, which are then reviewed and considered for purchase in the Covestor Hard and Soft Commodity and Fundamental Growth portfolios.

As always, my family and I have almost all of our equity investments in the stocks that are in your portfolios, this does not guarantee a return, but it does focus my attention on things that matter to you as an investor.

Certain information contained in this presentation is based upon forward-looking statements, information and opinions, including descriptions of anticipated market changes and expectations of future activity. The manager believes that such statements, information and opinions are based upon reasonable estimates and assumptions. However, forward-looking statements, information and opinions are inherently uncertain and actual events or results may differ materially from those reflected in the forward-looking statements. Therefore, undue reliance should not be placed on such forward-looking statements, information and opinions.

Covestor Ltd. is a registered investment advisor. Covestor licenses investment strategies from its Model Managers to establish investment models. The commentary here is provided as general and impersonal information and should not be construed as recommendations or advice. Information from Model Managers and third-party sources deemed to be reliable but not guaranteed. Past performance is no guarantee of future results. Transaction histories for Covestor models available upon request. Additional important disclosures available at http://site.covestor.com/help/disclosures. For information about Covestor and its services, go to http://covestor.com or contact Covestor Client Services at (866) 825-3005, x703.

Gerry Sparrow

Gerry Sparrow

Sparrow Capital Management is a registered investment adviser based in Missouri. Gerry Sparrow, an investment professional with more than 20

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