Opening Statement from the February 2015 issue of Dividend Gems

Opening Statement from the February 2015 issue of Dividend Gems

First published on February 16, 2015 for subscribers to Dividend Gems

In the month of January we released three videos discussing securities in the Dividend Gems Recommended List (please check the DG Video Folder for these videos). 

We had been warning about the unsustainable run-up in Utilities since the December 2014 issue. Because the price trend in this sector remained bullish we did not recommend readers to sell these securities. Rather, we left it up to each investor to monitor and/or determine how and when to respond to our warnings. As it would turn out, Utilities continued to rally through the end of January.

By the start of February, Utilities began a severe correction as the US stock market rallied towards a new high. Given that the rally in Utilities was largely due to a flight to safety (as previously discussed), the fact that Utilities sold off once investors rushed back into the stock market was fairly predictable.

Despite the recent strength in the global equities markets, we continue to see weakness in Europe, Latin America, South Africa, Russia, Australia, Canada, many parts of Asia. Meanwhile, the risks continue to mount in China.