The Bargain Stock Monitor is one of three market statistics used as performance expectation analyzers for Market Cycle Investment Management "Model Portfolios". It is derived from the Month End Value Stock Watchlist screening program which identifies Investment Grade Value Stocks trading at least 15% below their 52-week high, and that also meet the price selection criteria outlined in The Brainwashing of the American Investor: The Book that Wall Street does not want YOU to read.

The "15% down" break-point allows you to keep your eye on "Bull Pen" items. (You really need to be familiar with the selection rules to get the most from the BS Monitor - chuckle - and from the Watch List program.)

The fewer IGVSI equities at bargain prices, the stronger the market and the more Smart Cash that should be accumulating in the equity bucket of your portfolio. As the list of bargain Investment Grade Value Stocks grows (indicating market weakness), portfolio Smart Cash should be finding its way back into undervalued securities.

The 2011 Monitor documents the rally that began in March 2009. At year end 2010, barely 2% of the entire IGVSI universe were at bargain price levels --- only 7 stocks. April's "6" tied for lowest-month-end-number-ever honors, and clearly showed the continuation of a bubbling out of control rally. The April 30 number demanded continued "Buy Side" patience --- May & June showed you why!

Finally, a buying opportunity in IGVSI equities! In spite of some serious month end bargain hunting (or, possibly, window dressing), the month end "monitor" showed the weakest market conditions in ten months (but still not a big-deal correction). Bargain stocks doubled in May and re-doubled in June.

Those of you who heeded earlier "bubble" warnings and took your profits, should have repositioned some of your "Smart Cash" during June . As for me, I'm rubbing my hands together in excitement, hoping that the market weakness will continue for another few months --- in the long run, corrections are always a good thing.

If you did not take your profits by the April peak, one of these things happened: (a) You were greedy, and continued to ignore MCIM profit taking guidelines; (b) You didn't have profits because you failed to make new equity purchases during the last correction; (c) You didn't want to be burdened with those short-term capital gains that will surely disappear --- yet again; (e) You thought that the rally would last forever. Here's the warning you were given, right here.

"This rally was two years old on March 8th: Take your profits, and reload selectively (and patiently) when purchase opportunities materialize." You should still have profits, and you should be taking them.

On the "income" side of your portfolio, you should notice a significant value gain, and even some profit taking opportunities, as income CEFs (particularly the municipal variety) extend their three month rally.

Isn't this fun! And, income CEFs continue to pay excellent income.

ACTION ALERT: Continue to take profits, even while you continue to rebuild those patient equity portfolios.

Author's Bio: 

Steve Selengut
http://www.marketcycleinvestmentmanagement.com
Author of: "The Brainwashing of the American Investor: The Book that Wall Street Does Not Want YOU to Read", and "A Millionaire's Secret Investment Strategy"