For the week ending Jan. 23, 2016
•Our brain on money
Turns out the part of our brain that gets turned on when using cocaine is the same part of our brain that gets turned on when we’re making money.
From a Wealthmanagement.com story last week, comes this: “According to Kabir Sehgal, author of Coined, people making money and those high on cocaine had nearly identical brain scans. When further looking at brain scans of people who were high, images of money produced the most brain activity compared to those of naked women or dead bodies…”
Apparently outside influences also have a hand in how we make financial decisions as that same story reported people tend to tip more generously when the weather is nice and sunny. “Money obviously acts as a neural stimulant and it makes us act in very sort of irrational ways,” Sehgal said, as quoted on MedicalDaily.com. “And so the part of the brain that lights up, again the nucleus accumbens, keeps on firing and firing and firing and obviously money excites us.”
No word on what happens to our brains when we are losing money.
On that note, here is how the markets have performed recently.
Year-to-date performance figures for the major indices through January 22, 2016 according to Bloomberg. To provide a broader performance perspective, 1-year returns have been added.
-S&P 500 -6.61% YTD and 1-yr Rtn -5.61%
-Dow Jones -7.62% YTD and 1-yr Rtn -7.39%
-NASDAQ -8.28%YTD and 1-yr Rtn 2-.09%
-Russell 2000 -10.11% YTD and 1-yr Rtn -13.07%
Through Thursday, January 21, 2016 the average U.S.Diversified Equity fund was down 9.24%, according to Lipper. That’s a tad better than the 52-week performance of minus 9.51%.
World Equity Funds, on average, were off 10.65%. China Region, Japanese and Latin American funds taking the biggest hits. They were down 15.86%; 12.92%; and 12.20% respectively.
We all know China’s woes have become the world’s woes but one reason for the Latin American Funds’ lousy showing could be because the peso has fallen to its lowest value ever against the U.S. dollar: One Mexican peso is now worth barely more than a nickel (0.053 cents).
That’s bad news for emerging market investors but good news for anyone traveling to Mexico where the value of our dollars will now buy more sombreros than you can imagine.
Visit www.allaboutfunds.com for weekly updates to see how 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.
You will find all of Lipper’s weekly performance figures on both stock and fixed-income funds at www.allaboutfunds.com in the left column on the home page.
On another note, as of last November, when there were 12 Republican candidates running for our nation’s highest office, funds run by Goldman were favored by nearly 2-to-1. In second place, Vanguard funds. The tally was 57 to 28, according to Reuters.
Louis Navellier’s January 21, 2016 newsletter addressed the question of whether now was the time to buy energy stocks.
His answer was nope:” I advise everyone to continue to avoid energy and commodities stocks. Instead, I’m loading up on consumer stocks that are benefitting from falling oil prices, “ he wrote.
Here’s his reasoning: “Unfortunately, it looks like we’re going to work hard to keep that from happening. China’s slowing economy and currency devaluation have investors worried, and as the dollar continues to gain strength, U.S. markets are at an increasing disadvantage.
“There is good news in the midst of this, though: Congress recently passed a controversial budget bill that lifted the 40-year ban on crude oil exports. Two tankers have already left from Texas ports, and more shipments are expected soon. So hopefully, we can use this to balance out our crude stores.
“In the meantime, though, energy stocks are not the place to be. Natural gas prices are near 14-year lows, and crude oil is at a 12-year low. Kinder Morgan recently cut its dividend by 75% to help preserve its credit rating, and I would not be surprised if more energy companies follow suit.”
-Opportunity or not
Iran could be the hottest place for stocks over the next five years.
Speaking at Davos, Mohammad Nahavandian, the chief of staff to Iran’s president, expects the Iranian economy to grow at an average of 8 percent a year over the next five years.
“Iran may be one of the most promising emerging markets of the coming decades,” Nahavandian said.
Why? Because economic sanctions have been lifted thus opening the door for massive business opportunities.
-You can kiss WalMart Greeter jobs good-bye.
If part of your retirement working plan was to be a greeter at WalMart, the bad news is 269 of those stores will be closing; 154 of them in the U.S. Sorry.
Seems kinda weird. It wasn’t that many months ago when the chain, known for its cheapness on a variety of levels, announced they would increase hourly pay to 10 bucks. After that began, store closures were announced.
-Rents moving on up
Reis reported apartment rents up 4.6 percent, averaging $1,180, last year. That’s the fastest growth pace since 2007.
-Disgraceful income gaps
The world’s 62 richest billionaires have as much wealth as the bottom half of the world’s population, according to a new report from Oxfam International.
Let’s see, if the world’s population is 7.4 billion, half of that would be 3.7 billion. So, if that is true, it means the combined wealth of 62 individuals equals the combined wealth of 3.7 billion people.
There’s something very very very wrong with that.