For the week ending Feb. 13, 2016
- Yes, it’s a recession.
The good news: Not everybody agrees that we’re in a recession.
More good news: It’s only a recession and not a depression. Basic characteristics of a recession include at least two consecuitive quarters of a decline in GDP, a drop in consumer spending, personal income and business profits, etc.
But, if we’re to add moods into the overall economic picture, it sure feels more like a depression than it does a recession. And feelings matter when it comes to us, investing and market performance.
More good stuff about the recession subject at the end this blog.
- Market Quick Glance
Below are year-to-date performance figures for the major indices through February 12, 2016 according to Bloomberg. To provide a broader performance perspective, 1-year returns have been added.
-Dow Jones -7,99% YTD
1yr Rtn -9.13 %
-S&P 500 -8.51% YTD
1yr Rtn -9.18%
1yr Rtn -10.26%
-Russell 2000 -14.32% YTD
1yr Rtn -19.42%
The DJIA was down the least year-to-date of these four indices through Feb. 12th while the Russell 2000 had lost the most over the past year. It’s down nearly 20 percent—that’s awfully close to bear territory.
Dividend paying stocks continue to reward investors. And how can you say no to them when many are yielding far more than long-term Treasuries?
Two examples of attractive dividend yields based on 2/12/16 closing prices that have recently increased their dividends are Cisco’s (CSC0) big fat juicy dividend ratio of 4.14 % and Kimberly-Clark’s (KMB) at 2.86%. I’m not suggesting you run out and invest in either, I’m just sayin, take a look.
Or if fixed-income is a must-have for your portfolio and ETFs catch your eye, Zacks has an ETF rating of #2 (buy) on the 25+ Year Zero Coupon U.S. Treasury Index Fund (ZROZ) . Its 30-day SEC yield is 2.74% currently. And, iShares 20+ Year Treasury Bond ETF (NYSEARCA:TLT) with its current 30-day SEC yield of 2.48%.
Again, just sayin….
Lipper’s mutual fund performance numbers will posted later this week.
However, through Thursday, February 4, 2016 the average U.S.Diversisfied Equity fund was down 7.45 percent, according to Lipper.
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.
Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.
-Back to recession stuff
A story with plenty of graphs to help us all see why the recession talk is happening can be found in this CNBC.com piece titled, “Is the US economy running out of gas?”
In a nutshell, when you start adding up all the moving parts, such as real GDP, consumer spending, government spending, private investment, etc. together, the overall picture isn’t rosy.
But don’t believe me. Click on the site address below and see for yourself in the graphs accompanying that story: