POCKETBOOK: Week ending June 18, 2016

  • IMG_0204
  • 7 days worth of gun deaths

In only seven short days after the gun massacre at the Pulse nightclub in Orlando, 207 more individuals have died in gun-related deaths, according to CBS News.

 

  • Market Quick Glance

-Indices:

If you heard a “thud” at the close of business on Friday from Wall Street it was because  the major indices listed below  all closed the week down. Year-to-date gains of the four indices that follow  were stripped of between 1 and 1.5 percent of their returns from the previous week, and, lost roughly 1.5 to 3 percent of their 1-year total returns, according to Bloomberg.

Bottom line: The markets remain on shaky ground for a whole host of good reasons. The primary one? The economy. Then there’s the job thing, the gargantuan disparity in incomes between the corporate haves and worker bee have-nots, the state of economies around the world, war worries, concerns about rising debt levels…shall I continue?

Below are the year-to-date performance figures for the major indices through June 17, 2016, according to Bloomberg. To provide a longer performance perspective, 1-year returns have been added.

-Dow Jones +2.82% YTD

1yr Rtn +0.75%

-S&P 500 +2.42%YTD

1yr Rtn +.34%

NASDAQ -3.48% YTD

1yr Rtn 4.92 %

Russell 2000 +1.47% YTD

1yr Rtn -9.56%

 

-Mutual funds

Through Thursday, June 16, 2016 the average U.S.Diversified Equity Fund was up less than 1 percent to end the week up 0.82 percent, according to Lipper. That represents a loss of nearly 3 percent in seven days.

Biggest downward spirals went to Equity Leverage Funds. Last week this group had an average y-t-d performance of 13 percent but that has been shaved in half. The average fund under this heading was up 6.57 percent.

Average plus-side returns of over 4 percent were found in Mid-Cap Value Funds (last week their average return was 7.80 percent); Small-Cap Value Funds; and Equity Income Funds.

Under the Sector Funds umbrella, Precious Metals Equity Funds continue to be the top performers. Their average y-t-d return was 83.83 percent at the close of business on Thursday. That’s down 5 percent from the previous week’s close of 88.89 percent.

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.

  • Got cash?

No matter what anyone tells you, Cash is King. Always has been. Always will be.

I’ve always been a big proponent of telling my girlfriends—and anyone else who will listen—to keep a stash of cash in a spot that only they know of. And, is quick and easy for them to get their hands on.

My advice is usually met with a furrowed brow and the question, “Aren’t you supposed to keep your money in the bank or invested?”

My response is, “Nope. Not until you’ve already got a hefty stash at hand ready for those who-ever-knew moments.”

How much cash in your stash depends upon your lifestyle, size of family, station in life, etc., etc.

But one ideal rule of thumb would be to have six months worth of living expenses available.

Okay. Okay. I can hear your jaws drop. Most people don’t have enough money to cover a $400 emergency, come up with thousands for moving expenses , an emergency trip to the dentist yet alone the thousands of dollars necessary to build a 6-month sized war chest. But it’s a good goal.

Time flies particularly when money is tight. Or someone losses a job. Or an accident of any sort happens.

On that same Cash is King note, mutual fund and ETF investors have been cashing in on their investments lately.

From Thomson Reuters comes this data report for the week ending June 15, 2016: “Thomson Reuters Lipper’s fund macro-groups (including both mutual funds and exchange-traded funds [ETFs]) suffered net outflows of $19.1 billion for the fund-flows week ended Wednesday, June 15. This number marked the largest overall weekly net outflows since the week ended April 20, when U.S. funds saw over $32 billion leave…. Money market funds (-$13.6 billion) had the largest net outflows, while equity funds (-$3.4 billion) and taxable bond funds (-$3.1 billion) also contributed significantly to the total negative flows…”

Although I can’t tell you where that money is going, I can tell you that there is one fund type that is picking up inflows: municipal bond funds. That makes sense as the tax advantages of muni bond funds is targeted at  higher income individuals. Inflows into them last week totaled $904 million representing “the thirty-seventh consecutive week of net inflows for municipal bond funds” according to that report.

No matter where you stand on the income ladder, do me a favor and build yourself up a nice cash stash. You’ll be glad you did.

-30-

 

 

 

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