POCKETBOOK: Week ending Dec.2, 2016

Money
Money money and more money.

•Billionaire souls

I had lunch last week at a great little Greek restaurant in Boynton Beach. The place was/is so popular I wound up sharing the table with a Trump fan thrilled with the news that the makings of this president-elect’s Cabinet were all million-and-billionaires. To me that’s nothing to cheer about.

I recognize that there are tens of millions of people who automatically and absolutely think that if you’re rich you’re also smart, but my life experiences have taught me otherwise. What I’ve learned first-hand is that the only thing that being a millionaire or billionaire means is—drum roll please—that you’ve got money. And plenty of it. Period.

Being a billionaire doesn’t mean that you are smart, or compassionate or will make a good public servant. Or anything like that.

The honest bottom line is this: Brains and money don’t automatically go hand-in-hand.

In the case of this president-elect’s choice of Cabinet members, being a public servant –in whatever capacity–requires a different mindset than that of running a private company or a public corporation. And it is one that money can’t buy.

 

  • Market Quick Glance

Lest you’ve come to believe that it has been The Donald’s magic wand that has driven stock prices higher, so much for the wand.

At the close of business on Friday, December 1, 2016, all four of the indices followed here closed lower than they did during the previous week with one exception….the DJIA closed a tad higher, as in 24 basis points higher.

So while there may have been a short Trump rally, the president-elect did not create this long-toothed bull market. His presidency, however, could crush it especially if you believe the following:“In every single instance at the end of a two-term presidency, there’s been a recession. This means there is a 100% chance of recession for the new president.”

John Mauldin wrote that in his recent SeekingAlpha.com column titled, “We Are Putting Off The Inevitable”.

With that in mind, let’s hope your portfolio’s year-end returns are holiday sweet.

Below are the weekly and 1-year performance results for four popular stock indices along with their respective P/E Ratios based on prices at the mid-day close of business on Friday, Dec. 2, 2016, according to Bloomberg.

-Indices:

-Dow Jones +12.90% YTD up a tad from last week’s 12.66%

  • 1yr Rtn +10.33% downa tad from last week’s 10.48%

P/E Ratio 18.21 down a tad from last week’s 18.23

 

-S&P 500 +9.46% YTD down from last week’s 10.47%

  • 1yr Rtn +7.11% down from last week’s 8.21%

P/E Ratio 20.50 down from week’s 20.7

NASDAQ +6.30% YTD down from last week’s 9.17%

  • 1yr Rtn +3.61% down from last week’s 6.73%

P/E Ratio 30.60 (last week NA)

 

Russell 2000 +17.27% YTD down from last week’s 20.16%

  • 1yr Rtn +12.74% down from last week’s 13.73%

P/E Ratio 45.59 down from last week’s 46.89

 

-Mutual funds

Just as equities fell during the week, so too did the year-to-date performance of the average U.S. Diversified Equity Fund. At the close of business on Thursday, Dec. 1, 2016, the average fund under this broad heading was up 8.55%, according to Lipper. Last week that average was 9.67%.

Small-Cap Value Funds were up on average 22.47%, down a bit from the previous week’s close.

Equity Leverage Funds were up 17.42% and Mid-Cap Value Funds up 16.03% on average. that lead the way, up on average 23.21%.

Year-to-date returns for investors in the largest mutual funds around take note that the top performer of the 25 largest is the Dodge & Cox Stock fund, up 20.08%. Next in line the American Funds IA:A, up 12.59%.

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

  • Interest rates and you

If there is one truth to behold about interest rates it is this: Any movement in interest rates impacts all of us.

In a rising interest rate environment decide to buy a home, car or any other kind of loan in which fixed-income plays a part and you’ll be paying more the the privilege of borrowing money.

Decide to bank any part of your momey and it will be working harder for you—albeit the return could be puny.

 

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POCKETBOOK: Week ending Nov. 25, 2016

  • Thankful feasts

If you need someone to blame for Thanksgiving falling on a Thursday and the three-day weekend that follows, blame Plymouth’s governor William Bradford. According to History.com, in 1621 Bradford “invited local Indians to join the Pilgrims in a three-day festival held in gratitude for the bounty of the season.”

Three-hundred and twenty-years later President Franklin D. Roosevelt signed a bill establishing the fourth Thursday in November as Thanksgiving Day.

 

  • Market Quick Glance

Oh me oh my. It was a record-breaking holiday week of ups for stock indices. How high can they go? I wish I knew.

Off the top of my head, I can’t recall any talking head who– at the beginning of this year– figured the Dow would be up well over 12% come the end of November. But it is.

The rally some are referring to as the Trump Bump I’d say is more of a reflection of how well our economy is doing—and has been doing—thanks to moves made by the Obama administration.

In case you have forgotten, eight years ago the US was in an economic world of mess. And in case you have forgotten, under President Obama’s time in office the markets, job creation, corporate profits, national security, life in general, etc., have gotten better for millions of Americans including the wealthy and those less financially fortunate.

To assume that same kind of over all prosperity will continue to be the case under a Trump administration would be, well, unrealistic. As the word “assume” shows us, to assume anything makes and “ass” of “u” and “me”.

So, with year’s end not that far off, and market indices at all time highs, the big guess is how the indices will end the year. Or, perform in 2017 under a new administration.

Given the uncertainties, and depending upon your individual situation/circumstances, now might be a good time to consider taking some money off the table. Or not. After all, taking profits and making money is what this game is all about.

Below are the weekly and 1-year performance results for four popular stock indices along with their respective P/E Ratios based on prices at the mid-day close of business on Black Friday, Nov.25, 2016. All, according to Bloomberg.

-Indices:

-Dow Jones +12.66% YTD up from last week’s 10.98%

  • 1yr Rtn +10.48% up from last week’s 8.74%

P/E Ratio 18.23 up from last week’s 17.96

 

-S&P 500 +10.47% YTD up from last week’s 8.87%

  • 1yr Rtn +8.21% up from last week’s 6.74%

P/E Ratio 20.70 up from week’s 20.37

NASDAQ +9.17% YTD up from last week’s 7.58%

  • 1yr Rtn +6.73% up from last week’s 5.66%

P/E Ratio NA

 

Russell 2000 +20.16% YTD up from last week’s 17.33%

  • 1yr Rtn +13.73% up from last week’s 13.66%

P/E Ratio 46.89 off a smidge from last week’s 46.90.

 

-Mutual funds

As market indices soared to new heights, so too did the year-to-day performance of the average U.S. Diversified Equity Fund. At the close of business on Thursday, Nov. 23, 2016, the avenge fund under this broad heading was up 9.67%, according to Lipper. That’s up roughly 130 basis points from the previous week’s close.

Once again it was Small-Cap Value Funds that lead the way, up on average 23.21%. Next in line, once again, were Equity Leverage Funds, up 19.42%.

Shareholders in Dedicated Short Bias Funds lost the most; the average y-t-d performance in this grouping of 172 funds was down 24.06%.

Under the Sector Equity Funds heading, that’s where you’ll find fund types likely to gain or lose the most, the five fund types with the highest year-to-date average returns were the earthly ones and include Precious Metals Equity Funds, 53.01%; Basic Metals Funds, 28.35%; Commodities Base Metals Funds, 25.89 %; Natural Resources Funds, 24.51%; and Energy MLP Funds, 22.26%.

The average World Income Fund was 5.45%.

In the fixed-income world the average YTD performance of General Domestic Taxable FI Funds was 6.35%.

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

  • America and inequality

Turns out, when you step back and look at the whole world, the U.S. is among the most unequal countries on the planet, according to data from the Organization for Economic Co-operation and Development, OECD.

One for instance? Those with incomes in the top 20% earn 8.7 times more than those with incomes that fall in the bottom 20%.

In Iceland, Norway and Denmark, countries with the lowest inequality among developed nations, the top 20% earn about 3.5 times more than the bottom 20%.

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POCKETBOOK: Week ending Nov. 18, 2016

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  • Russian relations, Trump and real estate deals

Palm Beach, Florida, will have its second president in part-time residency come January. Till then, there is no discounting the real estate relationship(s) Mr.Trump has had with rich Russians.

In the early 2000’s, Mr. T purchased a 6. 26 acre PB compound—that includes oceanfront property– for $41.4 million from the bankrupt Abe Gosman. According to stories gleaned from The Palm Beach Daily News, Gosman was “a health-care magnate and philanthropist” and had “declared voluntary bankruptcy in 2001, blaming chaos in the nursing home industry.”

A few years later, Trump sold the property for $95 million—more than double his cost– to an ownership company associated with Russian billionaire Dmitry Rybolovlev.

Since its purchase from Gosman, the property had been subdivided into three parcels.

Recently the Russian connection owners sold off one parcel of that compound—a 2.35-acre vacant lot with about 175 feet of beachfront— for $34 million.

The art of these deals? Buy low. Subdivide. Sell high.

 (Dear reader: Sure hope I got all those figures, people, statistics right. As we are all learning, following a Trump transaction of any sort is a lot like trying to follow a spaghetti graph.)

 

  • Market Quick Glance

Stocks are up a tad. Bond prices down. And the future with America’s first celebrity president-elect in decades is scaring the bejesus out of folks at home and abroad.

So what are investors supposed to do? The answer, as always, depends upon your own personal needs, age and how fat your bank/retirement accounts are as life isn’t likely to get any cheaper under a Trump presidency.

With that visual in mind, below are the weekly and 1-year performance results for four popular stock indices along with their respective P/E Ratios based on prices at the close of business on Friday, Nov.18, 2016. All, according to Bloomberg.

-Indices:

-Dow Jones +10.98% YTD up from last week’s 10.70%

  • 1yr Rtn +8.74% down from last week’s 12.23%

P/E Ratio 17.96 down from last week’s 17.97

-S&P 500 +8.87% YTD up from last week’s 7.92%

  • 1yr Rtn +6.74% down from last week’s 9.34%

P/E Ratio 20.37 up from week’s 20.21

NASDAQ +7.58% YTD up from last week’s 5.81%

  • 1yr Rtn +5.66% down from last week’s 7.71%

P/E Ratio 30.79 up from last week’s 30.31

Russell 2000 +17.33% YTD up from last week’s 14.34%

  • 1yr Rtn +13.66% up from last week’s 13.55%

P/E Ratio 46.90 up from last week’s 45.14

 

-Mutual funds

In a sketchy market the average U.S. Diversified Equity Fund gained some ground over the week and was up 8.34% at the close of business on Thursday, Nov.17, 2016, according to Lipper.

Small-Cap Value Funds continued to do well, up on average 20.12% followed once again by Equity Leverage Funds, up 16.45%.

Precious Metals Equity Funds continue to slide, now averaging +57.92%

Latin American Funds gained a little bit — up on average 25.18% while European Region Funds are down 5.70 percent year-to-date.

In the bond world, the average General Domestic Taxable Fund was up.6.70 year-to-date while the average World Income Fund up a bit less at 6.50%.

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

•Turkey: 69 cents a pound. Good company: Uncalculatable.

Word is this year’s Thanksgiving meal is supposed to cost a few pennies less than it did last year. I’ve heard something like 25 cents less. Big woo.

I also heard TV talking heads reporting that this year $50 is enough to cover the cost of Thanksgiving Day meal for 10. Really? Not at my house. Or anyone else’s that I know.

My friend Dede has already spent $125 for the basics and isn’t done shopping yet.

But no matter how you slice it—or for that matter who is slicing it—Thanksgiving is all about sharing a good company meal.

If it’s a day you celebrate, enjoy and be glad.

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POCKETBOOK: Week ending Nov.11, 2016

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  • A 25% win

Lest you believe that all of America loves President-elect Donald Trump, think again: Less than  50 % of all registered voters cast a ballot this year—the lowest voter turnout since 1984. Of that half, only about half of them voted for Trump for president. That translates into a win of roughly 25%. Nothing to write home about even though it translated into a White House win.

What a President Trump means for an America— in which 75% of citizens either decided not to vote or didn’t vote for him— is worrisome.

So, when you hear all the talking heads on radio, tv or online saying America is a divided nation, don’t believe them. America is way more than an equally divided nation—it is a seriously divided nation with a compass pointer strongly tilted toward the negative  and anchored in that direction by  fear and uncertainty.

And no, Trump did not win by a huge majority.

  • Market Quick Glance

A week ago, very few would have predicted that Donald Trump would win the election. Or, that stocks would host a hot diggity dog post Election Day rally during the days that followed. But, all of that did happen. You haven’t been dreaming.

What that positive news means for investors in the near term or by year’s end  is, of course, anybody’s guess as there will be plenty of economic news coming forth next week and during the weeks that follow.

Warren Buffett, the very comfortable and happiest looking optimist in America today, told CNNs Poppy Harlow,  (during a worth listening to interview),  that he doesn’t know how stock prices will perform next year. But, that in 15 to 20 years they would  be higher.

Nothing particularly sage-like about that call. But hey, Buffett is nice to listen to and watching him makes me kinda wanna jump up  on his lap–and pick his pockets.

With that visual in mind, below are the weekly and 1-year performance results for four popular stock indices along with their respective P/E Ratios. Figures are all  based on prices at the close of business on Friday, Nov.11, 2016 and according to Bloomberg.

-Indices:

-Dow Jones +10.70% YTD up substantially from last week’s 4.91%

  • 1yr Rtn +12.23% up a lot from last week’s 2.28%

P/E Ratio 17.97 up from last week’s 17.05

-S&P 500 +7.92% YTD up double from last week’s 3.38%

  • 1yr Rtn +9.34% up plenty from last week’s 1.50%

P/E Ratio 20.21 up from week’s 19.49

NASDAQ +5.81% YTD up from last week’s 1.93%

  • 1yr Rtn +7.71% way up from last week’s -0.61%

P/E Ratio 30.31 up from last week’s 29.43

Russell 2000 +14.34 YTD seriously up from last week’s 3.69%

  • 1yr Rtn +13.55% also seriously up from last week’s -1.55%

P/E Ratio 45.14 up from last week’s 41.25

 

-Mutual funds

After a week that was, the year-to-date  average return on  U.S. Diversified Equity Funds was up 6.15% at the close of business on Thursday, Nov.10, 2016, according to Lipper.

Under that broad umbrella heading, Small-Cap Value Funds scored the most, up on average 14.87%. They were followed by Equity Leverage Funds, up 14.74%.

The average Sector Equity Fund was up 7.87% with Precious Metals Equity Funds up 67.83 now—way off their year-to-date average fix-figure highs.

Around the world, Latin American Funds were up on average 24.31% and continue to top the year-to-date performance figures under the World Equity Funds heading. They, however, have  lost ground too. Last week their average y-t-d return was over 35%.

Please visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

  • Presidential Market Returns

History has shown us that a Democrat in the White House has proven more profitable to investors than when Republicans have lived there.

The  4-year annualized returns of the S&P 500, beginning on March 4, 1929 through August 5, 2016, show  during Democratic administrations the average annualized return of that index  up 10.83% vs. a  1.71% return under a Republican presidency, according to Forbes.

Oh my.

That said, four-year market returns basically have little to do with the party of the President. What matters much more than a party’s donkey or elephant affiliation is a host of other conditions—such as economic conditions, corporate profits, wars or lack of them, inflation, employment, etc. etc.

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Hillary’s hit and miss

file000244446264Hillary Clinton’s loss in her run for president of these United States reminded me of an old doctor joke: The operation was a success but the patient died. Yes, she did win the popular vote. But, lost the one that leads directly to the White House—the Electoral College vote. Shocking results, for sure. Not, however, the end of the world.

If you’re like most investors, the results of this campaign were both unexpected and unsettling. Stock and bond prices since the election have been predictively volatile and are likely to remain so going forward. For how long, depends upon so many variables included but not limited to inflation and recession worries, commodity and currency concerns and investor sentiments.

Then there are the questions of when the fulfillment of promises made by the president-elect will begin. When, for instance, will construction on the wall separating the U.S. and Mexico begin? Will Hillary be thrown in jail? Undocumented immigrants be forced to leave? The door for Muslims and others slammed shut? The Affordable Care Act dismantled? Taxes for the wealthy and corporations reduced?

All of those things, plus others, have been purported by president-elect Trump to make America great again.

Oh and BTW, what will happen if president-elect Trump is found to have had a hand in the December rape trial of an underage girl?

Time will tell.

But until then, it has become more important than ever for you–the money-minded individual investor—to focus on you. Period.

Spend some time this week reviewing and assessing what your current financial goals and needs are; what your intermediate- and long-term goals are; and making sure your current investment plan is on track to achieving them. Realizing, of course, that all along the way plans don’t always work out exactly as hoped.

Making money via the financial markets —whether you are buying or selling stocks and or bonds— has never been easy. And, growing money for future use even tougher.

But choose to participate in the markets and you’ve wandered into mysterious territory where things may appear to look one way and then turn out to be quite another.

It’s that way in politics, too. Just ask Hillary.

 

POCKETBOOK: Week ending Nov. 4, 2016

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  • Vote! Even if it’s at the graveyard.

I’m a big believer in exercising my right as a U.S. citizen to vote.

Ya sure the idea that the Electoral College winds up with the biggest say when it comes to who actually becomes president adds a wrinkle of its own but even so, never forget that my vote –your vote—everyone’s vote— counts. No matter if it was sent in by mail or done in person during early voting days or on Election Day.

That said, last week I learned about a polling location  I would never would have believed was real until I researched it: Graveyards .

Okay, not really in the graveyard–although aren’t there bunches of jokes about the dead voting? But I digress.

Apparently in states like Alabama or Indiana it’s not all that unusual to have the living show up to vote at graveyards—I mean at cemeteries.

Polling spots located at a designated cemetery are, and have been, very real official spots where the upright, breathing, and those with the proper ID may go to place their votes provided that’s the voter’s designated voting location.

Really. And you thought polling locations were just schools, or community centers, or fire stations or libraries, etc.

 

  • Market Quick Glance

Markets don’t like uncertainty. Never have. Never will. As a result, this contentious presidential campaign has shown an ugly side that has impacted stocks and bond prices all around the globe. The result? The indices have basically been on a downward slide for weeks now— and last week was no different.

At this point in time, it’s anybody’s guess as to how the markets will react to the Tuesday’s election results. Or, whether the indices will end the year in positive or negative territory. One thing we do know, however, is how they fared the last week.

On that note, below are the weekly and 1-year performance results for four popular stock indices along with their respective P/E Ratios. Data according to Bloomberg and based on prices at the close of business on Friday, Nov.4, 2016

-Indices:

-Dow Jones +4.91% YTD down from last week’s 6.47%

  • 1yr Rtn +2.28% down from last week’s 5.60%

P/E Ratio 17.05 down from last week’s 17.30

-S&P 500 +3.38% YTD down from last week’s 5.88%

  • 1yr Rtn +1.50% down from last week’s 4.51%

P/E Ratio 19.49 down from week’s 19.94

NASDAQ +1.93% YTD down from last week’s 4.76%

  • 1yr Rtn -0.61% down from last week’s 4.10%

P/E Ratio 29.43 down from last week’s 30.64

Russell 2000 +3.69% YTD down from last week’s 5.83%

  • 1yr Rtn -1.55% down from last week’s 3.77%

P/E Ratio 41.25 down from last week’s 41.84

 

-Mutual funds

Below is a quick look at the performance results of the top 5 Lipper Indices. Each index is composed of the top 15 to 30 funds within a Classification.

-Precious Metals Equity

85.84%

-Lipper Pr Metal Eq Fd IX

77.20%

-Latin American Funds

35.43%

-Lipper Glbl Nat Res IX

22.60%

-Commodities Precious Metals

21.64%

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

•Cash rules

No matter how popular plastic has become, people still prefer using cash instead of credit or debit cards.

According to a recent Money.CNN.com report that focused on a report by the Federal Reserve Bank of San Francisco’s Cash Product Office, of the 150 billion transaction last year, “Cash was used in 32% of all transactions last year, the highest of any payment method. Spenders used debit cards for 27% of purchases and credit cards 21% of the time.”

Claire Wang, a policy analyst at the San Francisco Fed said, “We still see significant cash preference despite rumors that everyone is switching over to cards.”

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POCKETBOOK: Week ending Oct.29, 2016

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•A cup of joe

I love my morning coffee. Make eight cups of it every morning in an old Mr. Coffee  and it’s all gone by noon. Lately I’m enjoying Seattle’s Best 5 described as  dark and intense.

It’s no secret that coffee consumption is a big deal in America. But, bet you did’nt know that Europe is the biggest consumer of coffee in the world,  and, that  the popularity of it is growing rapidly in Asia—with Vietnam leading the way. This according to the International Coffee Organization.

What you also might not know is that  a warming Earth isn’t good for coffee beans.

From a recent SeekingAlpha.com story, “The Future of Coffee Prices”, comes this: “If Earth’s climate continues to warm over the coming decades, obstacles to coffee cultivation will multiply. Consider Arabica coffee (Coffea arabica), the species grown for roughly 70 percent of worldwide coffee production. Arabica coffee’s optimal temperature range is 64°-70°F (18°C-21°C). It can tolerate mean annual temperatures up to roughly 73°F (24°C).”

According to my Google search,  Brazil, for instance, where coffee bean production is huge, temperatures in the summer  can reach 86 to 104 degrees in Rio de Janeiro and  regions in the south.

Investing in coffee-related anything comes with a jolt of risks as all commodity investments do. And, doing your homework is paramount before taking any caffinated leap.

With that in mind, coffee fans who like ETNs might consider researching the iPath Dow Jones-UBS Coffee ETN (JO). Or large company dividend-paying stocks like Starbucks (SBUX), Nestle (NSRGY) or The J.M Smucker Company (SJM).

 

  • Market Quick Glance

Last week the equity indices experienced more downs than ups  with the Russell 2000 losing the most ground, according to Bloomberg reflecting prices at the close of business on Friday, October 28, 2016.

Below are the weekly and 1-year performance results for four popular stock indices along with their respective P/E Ratios.

-Indices:

-Dow Jones +6.47% YTD up from last week’s 6.38%

  • 1yr Rtn +5.60% down from last week’s 5.61%

P/E Ratio 17.30 up from last week’s 17.23

 

-S&P 500 +5.88% YTD down  from last week’s 6.60%

  • 1yr Rtn +4.51% down  from last week’s 5.46%

P/E Ratio 19.94 down from week’s 20.11

 

NASDAQ +4.76% YTD down from last week’s 6.11%

  • 1yr Rtn +4.10% down  from last week’s 5.92%

P/E Ratio 30.64 down  from last week’s 31.30

 

Russell 2000 +5.83% YTD down from last week’s 8.51%

  • 1yr Rtn +3.77 down from last week’s 6.05%

P/E Ratio 41.84 down from last week’s 43.48

 

-Mutual funds

As of Sunday afternoon, Lipper’s Weekly Mutual Fund Performance Data hadn’t made it to my desk.

In the meantime, you can still visit www.allaboutfunds.com for weekly updates to see how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

  • 3rd graders beat money manager performance records

It’s been said before (and no doubt will be said again ) but most money managers don’t do a great performance  job over the long haul. Making that point comes this title from a recent ETF TRENDS.com story, “97% of All Money Managers Don’t Do as Well as a Third Grader.”

Results from a Dimensional Fund Advisors study found that “only 17% of money managers beat the S&P 500 Index over 15 years.” And,  “Investing in the S&P 500 Index simply means owning a fraction of every one of the largest 500 companies in the US. No skill is involved at all; a third grader can do this.”

Dimensional isn’t the only  group to find out that not-so-hot news. Dalbar Inc., a Boston-based research group, revealed that only 3% of money managers were able to beat the performance of the S&P 500 Index over 20 years.

Additionally, another Dalbar study fund investors who choose actively managed funds over passively managed ones—like index funds–earn 3% to 4% less each year.

Time matters. And fees do  too.

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I coulda voted twice

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For the first time in my life, I voted early. But before telling you more of that story, I’ve got to  point out that in my state, Florida, Trump’s name is the first one you’ll read on the ballot when deciding which presidential candidate to vote for

What happened to alphabetical order?

Turns out, the answer has to do with Governor Scott.

According to Florida law, in an election year the  party our state’s governor is affiliated with determines which presidential candidate’s name will get top billing on the ballot. In this case, because Scott is a Republican Donnie got the primo spot.

Seems a little preferential and right leaning to me. But that’s how it is.

As for  voting twice, let me begin with a little bit about our ballots. For openers,  the size of the voting ballot in Palm Beach County is yuge. Really yuge.

Our paper ballot is something like 20” x 9”. That’s a few inches shy of the length of a page in our local newspaper, at least double  the length of my iPhone and much larger than any menu you’ve ever seen. In other words, it is cumbersome yuge.

Nonetheless, it’s what we awkwardly have to work with.

To vote for whomever, all you have to do is fill in the space between the two arrows that follow your candidate of choice’s name. It’s like a  connect-the-arrows exercise.

Sounds simple enough. But I goofed up and  didn’t know that  until the machine that actually counts the votes spit my ballot out.

According to the person tending the  voting machine, I had voted for too many judges. He knew that because at the same time my ballot was being rejected a printout popped up stating the error. Good to know those machines really do work. No rigging going on here.

To correct my error the poll worker told me that I had two choices: I could override the judge selections on my ballot (voiding them all). Or, decide to take it from the top and vote again.

I thought a moment and said, “Screw the judges.”  I didn’t know much about any of them in the first place  and all I was really interested in was voting for our next president.

So I decided to let my original ballot be the one that counted  and  passed  up the opportunity to vote again.

That said, if this elections  winds up to be a super tight  with only a few votes separating the winner from the loser, don’t blame me. I know a few other people who also made mistakes on their ballots.  So blame the ballots in Palm Beach County where bigger isn’t always better.

(As an aside, I voted at the Police Department in downtown West Palm Beach. No waiting there. Give it a try if you haven’t voted yet and want to vote early.)

POCKETBOOK: Week ending Oct.22, 2016

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  • Time for a cocktail ETF?

Might be that the best way to handle the craziness surrounding this year’s election season is with a good strong cocktail. Then again,  perhaps a booze-based exchange-traded-fund will do.

If spirits are your thing, The Spirited Funds/ETFMG could be worth a snort. With the symbol WSKY, a few of the stocks in this brand new ETF include Diageo (DEO)—it owns Johnnie Walker and Bulleit; Pernod Ricard (PDRDF) the owner of Chivas Regal, Glenlivet and Jameson; and Brown-Forman (BRB) the parent company of Jack Daniels.

From a recent ZACKS report comes this: “The whiskey and spirits sector, a niche within the consumer discretionary space, has been seeing explosive growth. This is especially true as high end premium and super-premium bourbon and Tennessee whiskey brands saw revenues surge 50% and 155%, respectively, between 2010 and 2015 in the U.S. alone, as per the Distilled Spirits Council of the United States. Sales of distilled spirits climbed to a staggering $72 billion last year. Spirits have been seeing increased market share relative to beer over the past six years in the overall alcohol industry.”

But no matter how intoxicating The Spirited Funds may sound, all investors need to beware— niche investments like this ETF are best taken in small shots.

 

  • Market Quick Glance

Last week was an up one for the major indices— provided you were only looking at year-to-date returns and not 1-year results.

That said, below are where the weekly and 1-year performance results for four popular stock indices stood at the close of business on Friday, Oct. 21, 2016, according to Bloomberg. Plus, their respective P/E Ratios.

-Indices:

-Dow Jones +6.38% YTD éfrom last week’s 6.28%

  • 1yr Rtn +5.61% ê from last week’s 8.21%

P/E Ratio 17.23 ê from last week’s 17.43

-S&P 500 +6.60% YTD é from last week’s 6.17%

  • 1yr Rtn +5.46% ê from last week’s 7.23%

P/E Ratio 20.11 é from week’s 17.23

NASDAQ +6.11% YTD é from last week’s 5.23%

  • 1yr Rtn +5.92% ê from last week’s 8.16%

P/E Ratio 31.30 é a bit from last week’s 31.17

Russell 2000 +8.51% YTD é from last week’s 8.%

  • 1yr Rtn +6.05 é from last week’s 5.9%

P/E Ratio 43.48 ê a tad from last week’s 43.56

 

-Mutual funds

At the close of business on Thursday, Oct. 20, 2016, the year-to-date average return for U.S. Diversified Equity Funds was up 4.90%, according to Lipper.

Taking a broader look, the average World Equity Fund was up 5.96% year-to-date. That’s about 1% higher return that the average U.S. Diversified Equity Fund.

Staying with that world view, equity funds in Latin America continue to be winners, up on average 41.87%. Far behind, but still in double-digit land, were Emerging Markets Funds, up nearly 15% on average (12.92%), India Region Funds, up 12.43% and Pacific Ex Japan Funds, up 10.12%.

On the downside, there were only two losing World Equity Funds: European Region Funds, down 2.29% on average and International Large-Cap Value Funds, off less that one-half of 1% at 0.43%.

And the world ruled in the income arena too. Of the 802 funds under the World Income Funds heading, the average fund was up 10.22 %. Domestic L-T Fixed Income Funds, on the other hand returned, on average, 6.51%.

Make sure to check out the mutual fund performance figures Lipper publishes weekly and use their YTD returns as a guideline for how your individual fund(s) are performing.

Visit www.allaboutfunds.com for weekly updates to see how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.

  • A dying profession

Once upon a time banks used to be the place wannabee robbers would dream about hitting. But today that kind of get-rich scheme is oh-so last century.

According to the FBI, over the past 25 years bank heists are down 60%. Worse yet, their potential take has fallen too. In the past decade it averaged under $6,500.

Not only is the reward not worth the risk, there are more security measures at banks then ever before. And, banks don’t keep the kind of cash on hand as they once did. At PNC, for instance, a teller told me if I wanted to take $9,000 in cash from my account, I’d have to call ahead, then probably wait a day or two until they could make the cash available.

So much for robbing banks.

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POCKETBOOK: Week ending Oct.15, 2016

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  • Love those Dogs

I’m a big fan of the Dogs of the Dow investment strategy. Maybe it’s because I love dogs. Maybe it’s because the investment strategy is simple enough for everyone to understand; you simply buy the 10 highest yielding stocks in the DJIA at the beginning of the year and let that group run until  year’s end. It’s a one-year investment plan that offers both the opportunity for the prices on the 10 stocks to do their thing with a bit of income security tossed in –dividends.

 

I’m also a fan because the strategy can pay off and this year the Dogs are doing well.

 

According to Bespoke, the Dogs were up 12.82% as of October 12. That’s way ahead of any of the major market indices.

 

More Good Boy Good Girl doggie data from Bespoke:

-All 10 stocks are up so far this year.

-8 of the 10 are up by double-digits

-Caterpillar (CAT) is up the most: 28.78%.

-Only 1 of the 10 stocks increased its dividend so far this year: Cisco (CSCO).

 

That last point is worth remembering. Why?  Because it’s a reminder that nothing in the equity world is carved in granite and just as the price of a stock can go up and down, dividend payouts can change over time too.

 

  • Market Quick Glance

All four of the major indices followed here  eneded last week down continuing its downward slide.

 

That said,  even though they were down, they are still up year-to-date.

 

Below are where the weekly and 1-year performance results for four popular stock indices stood at the close of business on Friday, Oct. 14, 2016, according to Bloomberg,

 

Before going there, if you like to play “Which Way Is the Market Headed” and look at market P/Es to help,  I’ve added where the P/E Ratios for the four popular stock indices stood at week’s end.  Basically, pros say the higher the P/E the riskier the market.

 

-Indices:

 

-Dow Jones +6.28%  YTD down from last week’s 6.88%

  • 1yr Rtn +8.21% down from last week’s 9.65%

P/E Ratio 17.43

 

-S&P 500 +6.17% YTD down about 1 percentage point from last week’s 7.19%

  • 1yr Rtn +7.23% down a lot from last week’s 10.30%

P/E Ratio 20.09

NASDAQ +5.23%  YTD off from last week’s 6.81%

  • 1yr Rtn +8.16% down a heap from last week’s 11.06%

P/E Ratio 31.17

 

Russell 2000 +8.00% YTD down a lot from last week’s 10.14%

  • 1yr Rtn +5.90%  down from last week’s 7.73%

P/E Ratio 43.56

 

-Mutual funds

Heading South.

 

At the close of business on Thursday, Oct. 13, 2016, the year-to-date average return for U.S. Diversified Equity Funds was up 4.40%, according to Lipper. That’s down from last week’s 6.15% average and the Oct.6 year-to-date average return of nearly 7% (6.94%).

 

Even gold has lost a lot of its luster. Nonetheless, its average return is nothing to stick your nose up at:  The average year-to-date return of Precious Metals Equity Funds is nothing to stick a nose up at– 77.04%.  That said, it’s wasn’t all that long ago when its average returns were up well over 100%.

 

Make sure to take advantage of the wonderful world of mutual fund performance figures Lipper makes publishes. Use their YTD returns as a guideline for how your individual fund(s) are performing. For instance, Lipper reports the average stock fund is up about 6.79 percent so far this year. Are your stock funds doing •

 

Visit www.allaboutfunds.com for weekly updates to see how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.

 

  • Inflation

Don’t forget…it’s real. Always has been. Always will be. Here’s what I mean:

From Alexander Green, chief investment strategist at The Oxford Club: “Sure, we no longer have the double-digit (inflation) rates of the late ‘70s and early ‘80s. But inflation is still out there – like a slow leak in your pool or termites in an antebellum house – detracting from the value of what you own.”

But here’s the rub from Green’s Investment Wisdom #2906: “Even with the lower rates of the past couple decades, it takes $4,371 today to buy what $2,500 would have bought in 1991.”

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