Welcome to the May 28, 2008 issue

View MONEYLETTER Hotline as a PDF (click icon):     
or keep reading...

Right now oil has the market in its grip, and until energy prices settle down it will be difficult for the market to make significant headway. Even so, the market continues to surprise by its ability to resist any major decline so far. There are buyers out there. Also investors are constantly being surprised lately by the resiliency of the economy.

Today's report on April new business investment orders show orders rising. Recently there has been much gloom about orders coming from no less a source than the Federal Reserve. Yesterday, the Wall Street Journal reported that home sales are rising in hard-hit areas. House prices have been slashed in areas of heavy foreclosures, and buyers are coming in to snap up bargains. None of this is to say that the economy is on the mend, only that there is a positive or two among the negatives. Those positives continue to say that the current weakness, however prolonged will be mild. It is the mildness that is providing the market with its resistance to a deep fall. We see the resistance continuing. We continue to view equities as the top asset class for investment now.

There is no change in our recommended allocations.

New Fund Ratings – For domestic stock funds, four funds are now rated Buy: Artisan Mid Cap Value (closed), S&P 400 Midcap Growth (ETF), Aston/Optimum Midcap N, and U.S. Global Holmes Growth. Four funds are rated Hold: GAMCO Growth AAA (closed), Fidelity Growth Company (closed), T. Rowe Price New America, and DWS Large Company Growth S. Fidelity Blue Chip Growth is now rated Sell. For international stock funds, two funds are now rated Buy: T. Rowe Price Europe & Mediterranean and Fidelity China Region. Two funds are now rated Hold: Vanguard Emerging Markets ETF and Janus Overseas. Two funds are now rated Sell: Matthews Asia Growth & Income and Wintergreen Fund.

Fidelity Blue Chip Growth is in the Fidelity family Conservative portfolio. We will swap the fund for Fidelity Focused Fund in that portfolio. Wintergreen Fund is in the Moneyletter Venturesome and Moderate portfolios. We will switch the fund into U.S. Global Eastern Europe in both portfolios.

The Economy — New investment orders were less strong than they appeared, but they were still good news. We believe they illustrate the strength of export orders.

The Stock Market —

Bond Market —

The Select Portfolio — There is no change for this portfolio.

The next Hotline is scheduled for Wednesday, June 4 at 7pm.

Back