POCKETBOOK: Week ending Oct.29, 2016

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•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.

  • 3rd 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.

-30-

 

 

 

 

 

 

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