After a small decline in February, the stock market accelerated to the downside in March. There were a few strong up days during the month, but they were overwhelmed by the days in decline.
With the stock market riding high following a couple years of strong advances, any uncertainty can provide an excuse to sell. Unfortunately, there are plenty of things causing uncertainty in the stock market right now: president Trump’s tariff plans, declining consumer confidence, worsening inflation and a slowing U.S. economy, to name a few.
Which direction the markets will go is always up for debate, but to me it’s more likely movement will be to the downside. I’m buckling up for a wide ride, and staying ready to hopefully buy a few stocks that haven’t been priced so low in years.
In March, the Information Technology, Communication Services and Consumer Discretionary sectors led the S&P 500 into negative territory, each losing more than 7%. The index lost nearly 5%.
The Energy sector was the place to be in March, as that sector gained better than 4% during the month. Utilities was the only other sector in the green, and just barely at that (~0.4%).
Year-to-Date (YTD), 7 of the 11 S&P 500 sectors are still in the green, even though the index has lost about 5.1% (this decline is ~4.8% with dividends reinvested). Both Consumer Discretionary (-13.8%) and Information Technology (-12.8%) have really weighed heavily on the index.
I’ve been making changes to my Portfolio during the course of the month. I’ve made so many moves that I haven’t been able to post about them all. I’ve got at least two posts in the queue in order to catch up. Look for those shortly after this Portfolio Thoughts post is published.
As usual, in this month’s Portfolio Thoughts post I’ll be discussing the following items…
- Price Movement – I’ll look at my top advancers and decliners in my Portfolio during the past month.
- Top 10 Review – I’ll update my Top 10 Portfolios stocks and how they changed rank this past month.
- Weightings – I’ll examine the sector weightings within my Portfolio and let you know where I’ve made progress with regard to getting into my preferred weighting ranges.
- Watch List – I’ll share which stocks I’m looking at as I prepare to invest my capital in the coming months.
Here are my Portfolio Thoughts for March 2025…
Price Movement
Note – my price changes cover closing prices from 2/25/25 to 3/28/25.
While the stock market turned decidedly negative in March, my ratio of stock gains to stock declines held up better than I expected. Of my 59 holdings, 17 managed to rise in price, while the remaining 42 pulled back. This ratio was essentially 2:5. However, the average loss was noticeably higher than the average gain, so the net effect seemed worse.
Here were the stocks with the biggest moves to the upside and downside…
Of my 17 stocks that rose in price in March, none managed to gain more than 20% (that’s two months in a row for this). In addition, I only had 1 stock with at least a 10% advance (the usual threshold I monitor for). Another six stocks gained at least 5%. Basically, there was not too much to get excited about here when it comes to the magnitude of any gains.
My top gainers in March were:
- Nexstar Media Group (NXST), surging 18.24%
- UnitedHealth Group (UNH), popping 9.71%
- Intuit (INTU), jumping 7.79%
- General Dynamics (GD), rising 7.67%
- Enbridge (ENB), advancing 6.75%
All the stocks on my top gainers list came from a different sector.
Nearly doubling my next closest gainer, NXST had a stellar 18.24% gain in March. This erased 4 straight months of declines, with the stock ending the month at its highest level since last July.
After being my 2nd worst decliner last month, UNH executed an about face and ended March as my 2nd best gainer. Concerns about an investigation into the company’s Medicare billing practices abated, although there’s still plenty of recovery to do. The stock ended a 3-month losing streak.
One of my Portfolio newcomers graced my top gainers list this month. INTU climbed 7.79% on the heels of a nice earnings report. The stock has underperformed for several months (which was a factor in me adding the stock), so it seems ripe for a rebound.
Standing out amongst my Industrials stocks was GD. Its 7.67% rise easily outpaced my next best Industrials stock (a 2.1% gain from FAST). This was also notably better than the 1.55% loss posted by fellow defense stock, Lockheed Martin (LMT).
Given that Energy was the best-performing sector of the month in the S&P 500, it’s only right that an Energy stock made it onto my top gainers list for March. ENB rallied 6.75%, just better than the 6.18% gain posted by my other Energy stock, Chevron (CVX). The gain from ENB nearly wiped out its loss from February.
Note – only 1 sector in my Portfolio had all their holdings in the green this month: Energy (2).
Of my 42 stocks that fell in price, several declined by double-digit percentages. The worst of the bunch dropped more than 20%. In addition, a whopping 8 more stocks sank by more than 10%. Yet another 11 stocks posted losses topping 5%. That’s more red than I care to see in any given month!
My worst decliners for the month of March were…
- Nike (NKE), plummeting 22.55%
- Broadcom (AVGO), tanking 16.50%
- Accenture (ACN), sinking 16.15%
- Starbucks (SBUX), retreating 14.71%
- T. Rowe Price Group (TROW), dropping 13.80%
My top decliners list showed a pair of stocks from the Consumer Discretionary sector and a pair from the Information Technology sector. No surprise here given that these were the worst-performing sectors in the S&P 500 in March.
NKE topped my worst decliner list in March. It’s dealing with several issues with its business right now including: sales declines (especially in China), concerns about its turnaround, high inventories, weak consumer demand, and the impact of tariffs. The stock is as low as it’s been since the beginning of 2018. Wow!
AVGO has given up the stellar gains it’s tacked on since December of last year… falling just as quickly as it had risen. The stock is no longer pushing a 10% weighting in my Portfolio and has dropped to a less elevated 6.5% weighting.
Concerns about its U.S. government business led to a haircut in ACN’s share price. The stock is back to levels last seen in mid 2024.
After reaching a 52-week high last month, SBUX gave up that level up in no time. However, the stock is still up for the year.
TROW hadn’t closed out a month below $100 in over 15 months… until March. The stock has retreated for 4 consecutive months after reaching a 52-week high at the end of last November.
Note – 2 sectors in my Portfolio had all their holdings in the red this month: Consumer Discretionary (3) and Materials (3).
Top 10 Review
Make it 6 months in a row that the same 10 stocks have existed in my Top 10. When will this party be broken up?
Half the Top 10 changed rank in March, but this didn’t include my 4 largest holdings – they clung to their positions.
Seven of the Top 10 stocks were in the red in March. Most of the losses were modest outside of the big decline from Broadcom (AVGO).
My biggest mover to the upside jumped a couple of spots in the rankings, while my biggest mover to the downside only slipped a single spot.
Starting at the top, AVGO, Aflac (AFL), Qualcomm (QCOM) and Visa (V) continued to hold down rankings #1 through #4, respectively. Each stock represents at least 4% of my Portfolio. AVGO was able to claim #1 with ease, despite its 16.5% decline in March. It remains my largest position by far.
Switching spots at #5 and #6 were AbbVie (ABBV) and RPM International (RPM). It was ABBV climbing one spot, while RPM fell. ABBV notched a small gain during the month, while RPM tumbled more than 7.3%. These two are now very close in weighting, so they could easily switch spots again next month.
Holding steady at #7 was BlackRock (BLK). The stock only fell a little more than 1% during March.
The largest move in the Top 10 this month came from Fastenal (FAST). The stock rose two spots in the rankings (thanks to its 2.1% gain in March) to secure the #8 position.
Slipping one spot down to #9 was Procter & Gamble (PG). The stock declined almost 2.7% during March.
Settling in the final spot at #10 was Lowe’s Companies (LOW). LOW slid nearly 5.7% in the month, but still has some room to drop before possibly falling out of my Top 10. This is my only Top 10 company that doesn’t have at least a 3% weighting in my Portfolio.
Union Pacific (UNP), JPMorgan Chase & Co. (JPM) and now Nexstar Media Group (NXST) are lurking outside the Top 10. While UNP and JPM each declined more than 5% in March, NXST was gaining better than 18% to get itself into the conversation. They all need to gain about $2K in value to sniff the Top 10.
From the table above, my Top 10 holdings now comprise 40.01% of my Portfolio value. This is a decrease of 0.63 percentage points compared to last month. The big share price drop by AVGO was a major contributor to the Top 10 weighting decline this month.
As for the dividend weighting of my Top 10, it finished the month at 28.30%. This is a decrease of 0.27 percentage points compared to last month. The decline was the result of new investment going into holdings outside the Top 10. There were no dividend raises inside my Top 10 in March either.
Weightings
In general, for the Sector Diversification, I target being within +/-3 percentage points of the sector weightings of the S&P 500. For the SuperSector Diversification, I target being within +/-5 percentage points.
The “Weight Diff.” column shows which sectors sit outside my preferred weighting ranges. If I’m overweight a sector, it’s shaded green. If I’m underweight a sector, it’s shaded red. If I’m within my target weighting range, then no shading exists.
In March, I made some progress on reducing the number of sectors I had that were outside of my target weighting range. My sale of CVS Health (CVS) and subsequent purchase of Alphabet (GOOG) helped Healthcare no longer be overweight, and allowed Communication Services to no longer be underweight.
So now, I’ve got 3 overweight sectors remaining: Industrials, Materials and Financials. The weighting difference percentage in each of these sectors went down in March. Thus, good progress was made in March with respect to moving into my preferred weighting ranges.
Meanwhile, I’ve got two underweight sectors remaining: Information Technology and Consumer Discretionary. Headway was made in Information Technology this month due to my purchases in that sector, however, I’m worse off now in Consumer Discretionary due to the poor March performance of my three holdings there.
Information Technology is still my largest sector at 18.52%, but its lead is weak. Financials are running a close second with a weighting of 18.15%. Despite a strong month from my pair of holdings in the sector, Energy remained my smallest sector at 2.37%. The 2.51% weighting of my Real Estate sector doesn’t put it too far ahead though.
As for the top sectors providing dividend income for my Portfolio, Healthcare and Financials remain very close, with Healthcare slightly ahead. My dividend weightings are more balanced across all the sectors compared to the value weightings. My top dividend sectors deliver a dividend weighting just above 15%, while my four lowest-paying dividend sectors are all in the 4%-5% range.
As always, I’ll keep all my sector weightings in mind as I continue to adjust my Portfolio, and my watchlist.
Watch List
This month I added shares from 3 stocks I mentioned in last month’s watchlist. From my Portfolio stocks, I added some Microsoft (MSFT) and FedEx (FDX). I also added a non-Portfolio stock in Alphabet (GOOG). Once again my watchlist came in handy, as I was ready to pounce once my price targets were reached.
Unfortunately, I did miss out on adding shares of NextEra Energy (NEE). It dipped below my target price for a couple days, but I’d allocated most of my investment capital elsewhere already, so it had to wait. By the time I had more capital, NEE was trading higher.
With the retreat of the majority of my Portfolio stocks in March, more favorable prices exist going into April. Given this, let’s see what might be new on this month’s watchlist…
Within my Portfolio, here are a few stocks that I’m watching for possible additions… let’s start with the stocks I added in March.
GOOG is currently my Portfolio’s smallest position. It’s also trading below where I initiated my position in March. Thus, I’m looking to add more shares. I’m targeting a price below $150.
I’d be inclined to add more FDX as well on a fall below $230. I’m continuing to grow this position as I can. It’s currently my smallest Industrials holding.
As for MSFT, I’m inclined to add a share or two as the price continues to drop. Right now, I’m looking for a share price below $370.
As for the stock that I didn’t buy in March, NEE, I’m slightly reducing my price target to $68 and will watch for the stock to trade below that level.
The Walt Disney Co. (DIS) faded in early March, dropping from over $110 to below $100. It hasn’t quite dipped below $95, but I’d look to add a handful of shares there.
I can lower my Hershey Co. (HSY) cost basis of $176.98 by adding some shares at current levels (~$170), but I’ll hold out for a price below $160.
Nike (NKE) has been nearly cut in half since the start of 2023. I’m watching for a decline that brings the price south of $60 before feeling OK about an addition.
As for non-Portfolio stocks that I’m watching…
Zoetis (ZTS) remains on my radar, but I’m dropping my price target from $160 to $155. I’m not sure I need another Healthcare stock right now, but below $155 I might convince myself to establish a position.
Costco (COST) dipping below $890 in mid-March caught my interest, but the stock has quickly bounced higher to nearly $950. Should the stock re-visit that $890 level I’d consider a starter position to make it a part of my Portfolio.
Thoughts?
What do you make of the retreat in Tech stock prices recently? Are prices low enough to dip your toes in the Tech waters? If not, how low would prices need to go? Another 10% lower? Please share your thoughts!