Week 35 Performance.....No new news from the Fed

Well the much anticipated Bernanke speech from Jackson Hole, WY Friday morning came and went without much of the fanfare that lead up to the actual speech.  What surprised me was that the equity markets actually rallied when there was no decisive action that came out of the meeting nor Bernanke's remarks.

We were expecting markets to pull back if there was no new program announced but instead the indices took a turn to the upside.  Having not announced a new monetary stimulus program we see as being good.  There is no need to add additional debt onto our already heavy debt load when it will not do much to stimulate growth.

Consumers are likely to remain cautious and businesses the same when it comes to deployment of new spending.  As we move into the statistically volatile fall months of September and October maybe, just maybe we don't see the usual volatility but instead as John Mauldin coined, "we muddle through" to find out who the next President will be and if congress extends the looming fiscal cliff into 2013.

Either way, volatile or non volatile markets, we see the way to game plan this market that we have consistently utilized all year is to stay balanced and conservative.  Balanced meaning having your core positions in place which in our Fund are solid dividend paying stocks, agriculture names, companies with strong balance sheets with some growth, and a few technology names for speculation purposes.  On the other hand, we have maintained a cash reserve position usually between 40% to 50% all year which is very conservative especially compared against our other mutual fund peers.

This play book has led to the DWCM Fund consistently and handily beating all four major equity benchmarks throughout 2012 and since the Fund's inception n March of 2011.

This week we did in fact take some steps to bolster our cash position as we had stated in last week's review in the DWCM Fund.  Our goal was to get our cash position back to near 50% from the low 40% level.  

We closed out one of our Apple long call positions as a rebalancing need as the company, which is our largest holding, was consuming too much of the overall Fund value.  We also excited our positions in technology names Riverbed and Marvel while selling off our Petmed Express holdings.


The week Ahead
Most people this week are probably more geared up for the opening of both the college and pro football seasons rather than the trading markets.  Even though it will be a shortened trading week in the US due to the Labor Day holiday on Monday, this week packs a punch of economic data with the biggest day being Friday with the release of the August jobs report.

It seems that no matter what month or mood the markets are in, the jobs report gets the most attention each and every month.  This season is probably more important because of the impact it could have on the US Presidential race.  

However on Tuesday, the release of the monthly auto sales numbers will be key in our eyes.  As we have stated before, we see the purchase of big ticket assets such as a vehicle a sign of consumer health and confidence.

• Mon - Happy Labor Day (in the US)
• Tue -  Motor Vehicle Sales,  PMI Manufacturing Index,  ISM Mfg Index,  Construction Spending
• Wed -  Productivity and Costs
• Thu -  Challenger Job-Cut Report,  ADP Employment Report,  Jobless Claims,  ISM Non-Mfg Index
• Fri -  Employment Situation

Have a great Labor Day Holiday and enjoy the kickoff to a new football season.

DreamWorks Capital Management
FREE LECTURE:  Our next finance lecture will be on Tuesday September 18th at the The Community House.   The topic will be Balancing Your Changing Investment Needs: Emergency Fund, Investments, Retirement, Education, and Philanthropy.  We will cover significant points regarding creating, developing, and executing on your wealth management plan.  We hope to have another interactive group, so be sure to sign up by emailing me directly at pfenner@dwcmllc.com or by contacting The Community House at 248-644-5832.  There is no charge and light refreshments will be served.