In my February letter to investors, I explained why I was increasing my position in J.C. Penney (JCP). Since that post, the stock has continued to be very volatile with double-digit gains and drops depending on the day.

This is usually the case when companies are having trouble, and in the short term this volatility mostly benefits speculators and day traders. I have no way of knowing for sure, but I believe that if you actually do your homework and stick to your guns, in the long term these types of “beaten” stocks can frequently be very rewarding.

In my opinion, an investor just needs the right measures of calm and patience in order to protect against the desire to sell in a panic. Most of the time this also requires an investor to ignore the media and professional recommendations to buy or sell.

Despite the fact that J.C Penney is underperforming the S&P 500 Index (SPX) so far in 2014 through the end of April, the company is on the right track for recovery in my opinion. The retailer is working toward recovery in ways that have historically been successful for other companies in similar situations: renegotiating debt, cutting expenses, stopping dividends, and increasing productivity.

My plan is to disregard any short-term price fluctuations that JC Penney (JCP) may have, and to be patient. Though I don’t have a crystal ball, this stock may rise again and stabilize. However, this is unlikely to happen overnight.

The global economy, individual companies, and frequently human beings all work the same way. Most everything goes through cycles with periods of abundance and spending, followed by periods of austerity and re-adjustment. As the old adages go, nothing stays up forever, and nothing is ever really as bad as it looks.

In general terms, the performance of the Dividend Paying Large Caps portfolio so far in 2014 is in-line with the S&P 500 Index (SPX).

In April, Apple (AAPL) and Intel (INTC) performed very well. They were up 9.9% and 3.4% respectively. Ecopetrol (EC) and J.C. Penney (JCP) fell 8.1% and 7.8%, respectively, in April. The remainder of my positions were more or less in line with the performance of the S&P 500.

In April 2014, I didn’t add any new position to my portfolio, and didn’t increase or decrease any of my holdings. Looking ahead, I plan to liquidate some of my positions later this year, and have already identified other opportunities in the stock market that are more attractive and may give a little boost to my portfolio. Details on these investments will be shared in my next communication to the followers of my strategy.

DISCLAIMER: The investments discussed are held in client accounts as of April 30, 2014. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable. Past performance is no guarantee of future results.