From 2000 until late 2013, US markets had been in a secular sideways market. After the S&P 500 took out its 13 year resistance of around 1560 this summer, it became clear that we had entered into a new secular bull market – the last one being from 1982 to 1999. One of the signs of the emergence of the new secular bull market has been the rotation into stocks that were stuck in trading range for much of the past decade. I call this emergence of the last secular bull market leaders ”The Great Rotation”.
I’ve mentioned a few of these re-emerging giants in my BNN appearances and Investors Digest/ Moneyletter columns. You can read all of the ID and ML columns by visiting the ValueTrend website (www.valuetrend.ca) and clicking on the “Keith’s articles” box at the bottom of the home page. A couple of these important bellwether stocks that are emerging from long termed consolidations are American International Group (AIG-N) and Texas Instruments (TXN-N) – charts above & below. We at ValueTrend took positions in these stocks a while ago when they broke through the ceilings noted on the charts. AIG in particular is still very early in the breakout stage.
Another bellwether stock that has recently broken out from a multi-year consolidation pattern is Microsoft (MSFT). We took a position in this stock after confirmation of the breakout. The 13+ year consolidation breakout suggests a significant upside for MSFT. Not only is this important to those who hold the stock– its significant for the overall markets as an secular bull market mover. Like AIG and TXN mentioned above—MSFT was a market leader during the 1982 – 1999 secular bull market. To me, it’s just one more piece of evidence pointing to a new secular bull market that could last for 15 + years.
At ValueTrend, we have been buying positions in the new leaders for the coming secular bull market- and we’ve been rotating out of the former leaders. Big breakout stocks like MSFT are the place you want to be in the coming years. Our portfolio is comprised of several such emerging leaders. If you feel that your portfolio is not poised to take advantage of this “Great Rotation”, perhaps you should be contacting us. For a complementary, no obligation, review of how your current portfolio is positioned for the Great Rotation, contact ValueTrend by emailing my associate Craig [email protected] or myself [email protected] –or you can call 888-721-8736.
We will confidentially discuss how your current strategy sets up for profiting in the “Great Rotation”.
Next week: Outlook 2014