POCKETBOOK: Week ending Oct.29, 2016

•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.

• 3^rd 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

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

• 

• 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

• 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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POCKETBOOK: Week ending Oct.8, 2016

•A makes-sense corporate tax idea that works for all of America

It’s no secret that plenty of US companies keep huge amounts of cash overseas because bringing it home would cost them plenty in taxes. Apple, for example, has the most moola outside of the U.S: over $200 billion.

But what if there was a creative way to get corporations to bring some of that money back into America that, by the by, would make life here at home safer and better for all of us?

Well, there is: Bonds.

In a Marketwatch.com story published on October 10, 2016, Standard & Poor’s suggested that companies, instead of paying big time tax bills on all of the money they have parked outside of the country, be allowed to commit “15% of it to investments in interest-bearing infrastructure bonds that would be issued by state and local governments…”

That’s a great idea given that more than $2trillion dollars is parked outside of America. And, that our country’s roads, bridges, etc. are in desperate need of repair given that little has been appropriated to improve them over the past 40 years.

Beth Ann Bovion, U.S. chief economist at S&P Global Ratings, said that there is plenty of “bipartisan support, including from the presidential candidates, to address our country’s infrastructure problems…”

I’m gonna guess there would be plenty of support from plenty of Americans for this idea too. It offers a simple solution to a much needed but overlooked problem that challenges each of our lives on a daily basis.

• Market Quick Glance

One week into the last quarter of 2016 and the market index scores were more sour than sweet.

Below are where the weekly and 1-year performance results for four popular stock indices stood at the close of business on Friday, Oct. 7, 2016, according to Bloomberg,

-Indices:

-Dow Jones +6.88  YTD down from last week’s 7.22%

• 1yr Rtn +9.65% way off from last week’s 14.13%

-S&P 500 +7.19%  YTD off from last week’s 7.85%

• 1yr Rtn +10.30 % down from last week’s 13.56%

–NASDAQ +6.81% YTD off from last week’s 7.18%

• 1yr Rtn +11.06 down over 4% from last week’s 14.38%

–Russell 2000 +10.14% YTD down from last week’s 11.45%

• 1yr Rtn +7.73% about in half of last week’s 14.05%

 

-Mutual funds

Year-to-date average returns for U.S. Diversified Equity funds changed direction during the week.

At the close of business on Thursday, Oct. 6, 2016, their average YTD return was up 6.15%, according to Lipper.

Take a broader view and of all equity funds that Lipper tracks—there are 15,128 of them—the average year-to-date return was 6.94% as of Oct. 6^th.

Moving into the land of taxable fixed-income funds, the average year-to-date return for the 4,943 funds that Lipper tracks was 6.78%.

I bet you thought the spread between equity funds and taxable fixed-income funds would be larger. But it’s not.

The top three fixed-income fund performance winners include Emerging Markets LC Debt Funds, up 15.22% on average; Emerging Markets HC Debt Funds, up 13.69%; and High Yield Funds, on average up 11.83%.

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 better or worse than that?

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.

• Donnie, sex talk and corporate America

I know a number of Donald Trump fans who believe because Trump is a business man, and is rich, that his business acumen makes him the perfect choice to lead America.

Trouble is, if Donnie held any upper level position at a public company in America today—whether that position is a  lower level management one or one up the ranks to president or CEO—  would be ousted from his job because of his dirty talk and  penchant for obscene sexual suggestions.

Even corporate America, where the bottom line carries a lot of weight, doesn’t stand for that kind of behavior.

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Pocketbook: Week ending Oct.1, 2016

• How about that Wells Fargo

It was notorious bank robber Willie Sutton who apparently said that he robbed banks because,”That’s where the money is.”

And in Wells Fargo’s cross-selling gotta-get-as-many-assets-and rack-up-as-many-fees-as-possible case, I think it’s fair to say that it’s banks that rob their customers for the very same reason: Because that’s where the money is.

So bank customers BEWARE. In this time of way-too-big-to-be- helpful banking, be ultra careful where you bank.

Make sure to keep on top of all of your bank accounts checking balances and activity in each frequently no matter which institution(s) you bank with.

When it comes to money, nothing is more important than knowing where it is and how it’s being handled.

• Stock investing can be really risky. Right, Mr. Trump?

Without getting into all of the details, in the mid-1990s, Donald Trump had a company that traded on the New York Stock Exchange with the stock symbol of “DJT”, according to CNNMONEY.com.

And, according to that same source, if you had invested 100 bucks into DJT in 1995, five years later you’d be left with $8.72. That’s a loss of 90%.

While you, Mr. or Ms. Investor, were left with pennies, DJT paid Trump $39 million in salary, bonuses, options and other compensations during that same time period.

• Market Quick Glance

Friday marked the end of a week, the end of the third quarter and the beginning of the last quarter of 2016.

As you might expect, the week’s performance numbers were different from the previous week’s.

Below are where the weekly and 1-year performance results for four popular stock indices stood at the close of business on Friday, Sept 30, 2016, according to Bloomberg,

-Indices:

-Dow Jones +7.22% YTD up from 6.94% YTD

• 1yr Rtn +14.13% down from 14.96%

-S&P 500 +7.85% YTD up from 63% YTD

• 1yr Rtn +13.56% down from 14.57%

–NASDAQ +7.18$ YTD up from 7.01% YTD

• 1yr Rtn +14.38% down from 14.76%

–Russell 2000 +11.45% YTD down from 11.64% YTD

• 1yr Rtn +14.05% up from 13.45%

 

-Mutual funds

Year-to-date average returns for U.S. Diversified Equity funds changed direction during the week.

At the close of business on Thursday, September 29, 2016, their average YTD return was 5.51%, according to Lipper. Last week the figure was 6.79%.

Comparing last week’s fund category results with this week’s, here’s how the numbers look:

• -Equity Leverage Funds had a YTD performance average of +20.84%—that’s down from last week’s number of +25.27%.
• -Dedicated Short Bias Funds, had an average YTD average return of -21.62%. That’s an improvement from last week’s -23.26%.
• -Precious Metals Equity Funds are now up 99.99% on average. That’s down a hunk from last week’s performance average of +107.93%.
• -Under the broad heading of World Equity Funds, Lipper tracks 4,429 of them, their average return is+6.41%. That’s down from last week’s average of +7.74%.
• -Latin American Funds continue to beat that broad heading and have an average YTD total return of 32.31%. That’s also down from last week’s average of 35.19%.

 

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 better or worse than that?

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.

 

That’s all folks…

 

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