POCKETBOOK:Week ending Aug.6,2016

  • IMG_0204High and highs

No matter what your feelings are regarding marijuana, there’s money in pot. Just ask the state of Colorado where taxing that  industry has brought in hundreds of thousands of dollars in tax revenues.

To catch a whiff of that high, investors in shares of Scotts Miracle-Gro Co (SMG) have been rewarded as the stock closed Friday at $79.56, near its  52-week high of $80.25. That’s  up from a 52-week low of $58.83, according to Yahoo Finance.

People have been using Scotts Miracle-Gro  products  for decades for all of their gardening and grass needs. In addition to making gardens grow, SMG also pays a dividend of 2.51%—better than the  current yields on long Treasuries.

Looking ahead, the pot industry doesn’t look to be going up in smoke any time soon. Scotts knows this. And, that fertile soil isn’t the only way to grow weed. Ask any home grower and they will tell you hydroponics is the best way to go.

To that end, one company Scotts has invested in is the Netherlands-based hydroponic equipment maker Gavita Holland BV.

With marijuana legalized in some form in 24 states and DC, it will be on the ballot in November in 12  more.

Like I said, the industry isn’t going up in smoke any time soon.

  • Market Quick Glance

The bull doesn’t appear to want to lay down and take a rest just yet.

Below are the closing YTD performance numbers of four popular US indices as of Friday, August 5, 2016, according to Bloomberg. One-year performance figures are also included.

-Indices:

-Dow Jones +8.12% YTD (Back to where it was 2 weeks ago)

  • 1yr Rtn +9.56%

-S&P 500 +8.20% YTD 

  • 1yr Rtn +7.39%

NASDAQ +5.13% YTD (A 2 percentage point improvement)

  • 1yr Rtn +4.92% (Ditto)

Russell 2000 +9.35% YTD (Up 1 percentage point)

  • 1yr Rtn +3.59% (A big gain from last week’s -0.01%)

 

-Mutual funds

The average U.S.Diversified Equity Fund ended the week up a tad less than it had in the previous week and at 5.23 % as of the close of business on Thursday, August 4, 2016, according to Lipper.

Yawn. Yawn. Equity Leverage Funds gained another 2% with the average fund up 24.65%. Again it had the most positive returns in the entire  gang of U.S. Diversified Equity Funds. Dedicated Short Bias Funds performed the worst—this week down on average 19.53%.

And almost more yawns go out to Precious Metals Equity Funds as this group continues to outperform other Sector Fund types: As of Thursday’s close the average return for them  was up 126.21% YTD. The yawn, however, isn’t really justified as that’s the highest average return for this fund heading so far this year. Lucky you if you’re an investor in one of the top performing funds in this group of 73.

If you’re not, don’t dispare. The average return for all types of Sector Funds thus far this year is a +12.82 %. Double-digit returns— no matter where you get them— are always something to be proud of.

Latin American Funds continue their upward swing gaining 4% from the previous week to close up 34.09% year-to-date.

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.

  • Negative Wealth

If you’re not familiar with the term “negative wealth” you’ve probably seen evidence of it. Or perhaps it’s a situation you’re all too familiar with. In short, it means  your debts add up to more than your assets.

According to the New York Federal Reserve, 14% of the U.S. population has negative wealth.

The particulars look like this: Negative wealth households have an average annual income of under $40,000 ($39,077); 19 percent of them own a home; and 36% of those homeowners are underwater on their mortgage payments.

Additionally, most are female, single and single parents.

On the other hand, positive wealth households have an average annual income of more than $86,309; 75% own a home; and just 4% have underwater mortgages.

The kicker is, the education level of negative and positive wealth households is pretty much the same.

Now what does that tell you?

 

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