August (August 2 - September 3) produced seesaw action, with a late month rally closing the S&P essentially flat at 1,104. During the month the S&P tested, and held, the 1,040 level we have been discussing as key support.
Here at Cofran Capital, we had a solid month, producing gains of 2.8%. Our defensive portfolio stance, coupled with significant dividend income, allowed us to book consistent profits with limited volatility. As we enter the de facto first trading day of September, our 21% cash pile will provide opportunities to make quick gains during a traditionally volatile September month. We will use new capital and dividend income to move closer to a fully invested position on any weakness in late September and mid October.
Overall Sentiment: Cautious to Neutral
Portfolio Yield: 7.62%
Projection: Range-bound. Support near 1,060; Resistance near 1,130. Break-out to 1,280 this winter.
Top 5 Positions:
- Cash - 21%
- Pitney Bowes (NYSE:PBI)- 6%
- iShares S&P U.S. Preferred Stock Index (NYSEARCA:PFF)- 4%
- SPDR Barclays Capital High Yield Bond (NYSEARCA:JNK)- 4%
- Johnson & Johnson (NYSE:JNJ)- 4%
Disclosure: Long: PBI, PFF, JNK & JNJ