POCKETBOOK: Week ending Nov. 25, 2016

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  Thankful feasts

If you need someone to blame for Thanksgiving falling on a Thursday and the three-day weekend that follows, blame Plymouth’s governor William Bradford. According to History.com, in 1621 Bradford “invited local Indians to join the Pilgrims in a three-day festival held in gratitude for the bounty of the season.”

Three-hundred and twenty-years later President Franklin D. Roosevelt signed a bill establishing the fourth Thursday in November as Thanksgiving Day.

 

• Market Quick Glance

Oh me oh my. It was a record-breaking holiday week of ups for stock indices. How high can they go? I wish I knew.

Off the top of my head, I can’t recall any talking head who– at the beginning of this year– figured the Dow would be up well over 12% come the end of November. But it is.

The rally some are referring to as the Trump Bump I’d say is more of a reflection of how well our economy is doing—and has been doing—thanks to moves made by the Obama administration.

In case you have forgotten, eight years ago the US was in an economic world of mess. And in case you have forgotten, under President Obama’s time in office the markets, job creation, corporate profits, national security, life in general, etc., have gotten better for millions of Americans including the wealthy and those less financially fortunate.

To assume that same kind of over all prosperity will continue to be the case under a Trump administration would be, well, unrealistic. As the word “assume” shows us, to assume anything makes and “ass” of “u” and “me”.

So, with year’s end not that far off, and market indices at all time highs, the big guess is how the indices will end the year. Or, perform in 2017 under a new administration.

Given the uncertainties, and depending upon your individual situation/circumstances, now might be a good time to consider taking some money off the table. Or not. After all, taking profits and making money is what this game is all about.

Below are the weekly and 1-year performance results for four popular stock indices along with their respective P/E Ratios based on prices at the mid-day close of business on Black Friday, Nov.25, 2016. All, according to Bloomberg.

-Indices:

-Dow Jones +12.66% YTD up from last week’s 10.98%

• 1yr Rtn +10.48% up from last week’s 8.74%

P/E Ratio 18.23 up from last week’s 17.96

 

-S&P 500 +10.47% YTD up from last week’s 8.87%

• 1yr Rtn +8.21% up from last week’s 6.74%

P/E Ratio 20.70 up from week’s 20.37

–NASDAQ +9.17% YTD up from last week’s 7.58%

• 1yr Rtn +6.73% up from last week’s 5.66%

P/E Ratio NA

 

–Russell 2000 +20.16% YTD up from last week’s 17.33%

• 1yr Rtn +13.73% up from last week’s 13.66%

P/E Ratio 46.89 off a smidge from last week’s 46.90.

 

-Mutual funds

As market indices soared to new heights, so too did the year-to-day performance of the average U.S. Diversified Equity Fund. At the close of business on Thursday, Nov. 23, 2016, the avenge fund under this broad heading was up 9.67%, according to Lipper. That’s up roughly 130 basis points from the previous week’s close.

Once again it was Small-Cap Value Funds that lead the way, up on average 23.21%. Next in line, once again, were Equity Leverage Funds, up 19.42%.

Shareholders in Dedicated Short Bias Funds lost the most; the average y-t-d performance in this grouping of 172 funds was down 24.06%.

Under the Sector Equity Funds heading, that’s where you’ll find fund types likely to gain or lose the most, the five fund types with the highest year-to-date average returns were the earthly ones and include Precious Metals Equity Funds, 53.01%; Basic Metals Funds, 28.35%; Commodities Base Metals Funds, 25.89 %; Natural Resources Funds, 24.51%; and Energy MLP Funds, 22.26%.

The average World Income Fund was 5.45%.

In the fixed-income world the average YTD performance of General Domestic Taxable FI Funds was 6.35%.

Visit www.allaboutfunds.com for more information about 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.

 

• America and inequality

Turns out, when you step back and look at the whole world, the U.S. is among the most unequal countries on the planet, according to data from the Organization for Economic Co-operation and Development, OECD.

One for instance? Those with incomes in the top 20% earn 8.7 times more than those with incomes that fall in the bottom 20%.

In Iceland, Norway and Denmark, countries with the lowest inequality among developed nations, the top 20% earn about 3.5 times more than the bottom 20%.

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POCKETBOOK: Week ending Nov. 18, 2016

• Russian relations, Trump and real estate deals

Palm Beach, Florida, will have its second president in part-time residency come January. Till then, there is no discounting the real estate relationship(s) Mr.Trump has had with rich Russians.

In the early 2000’s, Mr. T purchased a 6. 26 acre PB compound—that includes oceanfront property– for $41.4 million from the bankrupt Abe Gosman. According to stories gleaned from The Palm Beach Daily News, Gosman was “a health-care magnate and philanthropist” and had “declared voluntary bankruptcy in 2001, blaming chaos in the nursing home industry.”

A few years later, Trump sold the property for $95 million—more than double his cost– to an ownership company associated with Russian billionaire Dmitry Rybolovlev.

Since its purchase from Gosman, the property had been subdivided into three parcels.

Recently the Russian connection owners sold off one parcel of that compound—a 2.35-acre vacant lot with about 175 feet of beachfront— for $34 million.

The art of these deals? Buy low. Subdivide. Sell high.

 (Dear reader: Sure hope I got all those figures, people, statistics right. As we are all learning, following a Trump transaction of any sort is a lot like trying to follow a spaghetti graph.)

 

• Market Quick Glance

Stocks are up a tad. Bond prices down. And the future with America’s first celebrity president-elect in decades is scaring the bejesus out of folks at home and abroad.

So what are investors supposed to do? The answer, as always, depends upon your own personal needs, age and how fat your bank/retirement accounts are as life isn’t likely to get any cheaper under a Trump presidency.

With that visual in mind, below are the weekly and 1-year performance results for four popular stock indices along with their respective P/E Ratios based on prices at the close of business on Friday, Nov.18, 2016. All, according to Bloomberg.

-Indices:

-Dow Jones +10.98% YTD up from last week’s 10.70%

• 1yr Rtn +8.74% down from last week’s 12.23%

P/E Ratio 17.96 down from last week’s 17.97

-S&P 500 +8.87% YTD up from last week’s 7.92%

• 1yr Rtn +6.74% down from last week’s 9.34%

P/E Ratio 20.37 up from week’s 20.21

–NASDAQ +7.58% YTD up from last week’s 5.81%

• 1yr Rtn +5.66% down from last week’s 7.71%

P/E Ratio 30.79 up from last week’s 30.31

–Russell 2000 +17.33% YTD up from last week’s 14.34%

• 1yr Rtn +13.66% up from last week’s 13.55%

P/E Ratio 46.90 up from last week’s 45.14

 

-Mutual funds

In a sketchy market the average U.S. Diversified Equity Fund gained some ground over the week and was up 8.34% at the close of business on Thursday, Nov.17, 2016, according to Lipper.

Small-Cap Value Funds continued to do well, up on average 20.12% followed once again by Equity Leverage Funds, up 16.45%.

Precious Metals Equity Funds continue to slide, now averaging +57.92%

Latin American Funds gained a little bit — up on average 25.18% while European Region Funds are down 5.70 percent year-to-date.

In the bond world, the average General Domestic Taxable Fund was up.6.70 year-to-date while the average World Income Fund up a bit less at 6.50%.

Visit www.allaboutfunds.com for more information about 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.

•Turkey: 69 cents a pound. Good company: Uncalculatable.

Word is this year’s Thanksgiving meal is supposed to cost a few pennies less than it did last year. I’ve heard something like 25 cents less. Big woo.

I also heard TV talking heads reporting that this year $50 is enough to cover the cost of Thanksgiving Day meal for 10. Really? Not at my house. Or anyone else’s that I know.

My friend Dede has already spent $125 for the basics and isn’t done shopping yet.

But no matter how you slice it—or for that matter who is slicing it—Thanksgiving is all about sharing a good company meal.

If it’s a day you celebrate, enjoy and be glad.

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POCKETBOOK: Week ending Nov.11, 2016

• A 25% win

Lest you believe that all of America loves President-elect Donald Trump, think again: Less than  50 % of all registered voters cast a ballot this year—the lowest voter turnout since 1984. Of that half, only about half of them voted for Trump for president. That translates into a win of roughly 25%. Nothing to write home about even though it translated into a White House win.

What a President Trump means for an America— in which 75% of citizens either decided not to vote or didn’t vote for him— is worrisome.

So, when you hear all the talking heads on radio, tv or online saying America is a divided nation, don’t believe them. America is way more than an equally divided nation—it is a seriously divided nation with a compass pointer strongly tilted toward the negative  and anchored in that direction by  fear and uncertainty.

And no, Trump did not win by a huge majority.

• Market Quick Glance

A week ago, very few would have predicted that Donald Trump would win the election. Or, that stocks would host a hot diggity dog post Election Day rally during the days that followed. But, all of that did happen. You haven’t been dreaming.

What that positive news means for investors in the near term or by year’s end  is, of course, anybody’s guess as there will be plenty of economic news coming forth next week and during the weeks that follow.

Warren Buffett, the very comfortable and happiest looking optimist in America today, told CNNs Poppy Harlow,  (during a worth listening to interview),  that he doesn’t know how stock prices will perform next year. But, that in 15 to 20 years they would  be higher.

Nothing particularly sage-like about that call. But hey, Buffett is nice to listen to and watching him makes me kinda wanna jump up  on his lap–and pick his pockets.

With that visual in mind, below are the weekly and 1-year performance results for four popular stock indices along with their respective P/E Ratios. Figures are all  based on prices at the close of business on Friday, Nov.11, 2016 and according to Bloomberg.

-Indices:

-Dow Jones +10.70% YTD up substantially from last week’s 4.91%

• 1yr Rtn +12.23% up a lot from last week’s 2.28%

P/E Ratio 17.97 up from last week’s 17.05

-S&P 500 +7.92% YTD up double from last week’s 3.38%

• 1yr Rtn +9.34% up plenty from last week’s 1.50%

P/E Ratio 20.21 up from week’s 19.49

–NASDAQ +5.81% YTD up from last week’s 1.93%

• 1yr Rtn +7.71% way up from last week’s -0.61%

P/E Ratio 30.31 up from last week’s 29.43

–Russell 2000 +14.34 YTD seriously up from last week’s 3.69%

• 1yr Rtn +13.55% also seriously up from last week’s -1.55%

P/E Ratio 45.14 up from last week’s 41.25

 

-Mutual funds

After a week that was, the year-to-date  average return on  U.S. Diversified Equity Funds was up 6.15% at the close of business on Thursday, Nov.10, 2016, according to Lipper.

Under that broad umbrella heading, Small-Cap Value Funds scored the most, up on average 14.87%. They were followed by Equity Leverage Funds, up 14.74%.

The average Sector Equity Fund was up 7.87% with Precious Metals Equity Funds up 67.83 now—way off their year-to-date average fix-figure highs.

Around the world, Latin American Funds were up on average 24.31% and continue to top the year-to-date performance figures under the World Equity Funds heading. They, however, have  lost ground too. Last week their average y-t-d return was over 35%.

Please visit www.allaboutfunds.com for more information about 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.

 

• Presidential Market Returns

History has shown us that a Democrat in the White House has proven more profitable to investors than when Republicans have lived there.

The  4-year annualized returns of the S&P 500, beginning on March 4, 1929 through August 5, 2016, show  during Democratic administrations the average annualized return of that index  up 10.83% vs. a  1.71% return under a Republican presidency, according to Forbes.

Oh my.

That said, four-year market returns basically have little to do with the party of the President. What matters much more than a party’s donkey or elephant affiliation is a host of other conditions—such as economic conditions, corporate profits, wars or lack of them, inflation, employment, etc. etc.

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Hillary’s hit and miss

Hillary Clinton’s loss in her run for president of these United States reminded me of an old doctor joke: The operation was a success but the patient died. Yes, she did win the popular vote. But, lost the one that leads directly to the White House—the Electoral College vote. Shocking results, for sure. Not, however, the end of the world.

If you’re like most investors, the results of this campaign were both unexpected and unsettling. Stock and bond prices since the election have been predictively volatile and are likely to remain so going forward. For how long, depends upon so many variables included but not limited to inflation and recession worries, commodity and currency concerns and investor sentiments.

Then there are the questions of when the fulfillment of promises made by the president-elect will begin. When, for instance, will construction on the wall separating the U.S. and Mexico begin? Will Hillary be thrown in jail? Undocumented immigrants be forced to leave? The door for Muslims and others slammed shut? The Affordable Care Act dismantled? Taxes for the wealthy and corporations reduced?

All of those things, plus others, have been purported by president-elect Trump to make America great again.

Oh and BTW, what will happen if president-elect Trump is found to have had a hand in the December rape trial of an underage girl?

Time will tell.

But until then, it has become more important than ever for you–the money-minded individual investor—to focus on you. Period.

Spend some time this week reviewing and assessing what your current financial goals and needs are; what your intermediate- and long-term goals are; and making sure your current investment plan is on track to achieving them. Realizing, of course, that all along the way plans don’t always work out exactly as hoped.

Making money via the financial markets —whether you are buying or selling stocks and or bonds— has never been easy. And, growing money for future use even tougher.

But choose to participate in the markets and you’ve wandered into mysterious territory where things may appear to look one way and then turn out to be quite another.

It’s that way in politics, too. Just ask Hillary.

 

POCKETBOOK: Week ending Nov. 4, 2016

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• Vote! Even if it’s at the graveyard.

I’m a big believer in exercising my right as a U.S. citizen to vote.

Ya sure the idea that the Electoral College winds up with the biggest say when it comes to who actually becomes president adds a wrinkle of its own but even so, never forget that my vote –your vote—everyone’s vote— counts. No matter if it was sent in by mail or done in person during early voting days or on Election Day.

That said, last week I learned about a polling location  I would never would have believed was real until I researched it: Graveyards .

Okay, not really in the graveyard–although aren’t there bunches of jokes about the dead voting? But I digress.

Apparently in states like Alabama or Indiana it’s not all that unusual to have the living show up to vote at graveyards—I mean at cemeteries.

Polling spots located at a designated cemetery are, and have been, very real official spots where the upright, breathing, and those with the proper ID may go to place their votes provided that’s the voter’s designated voting location.

Really. And you thought polling locations were just schools, or community centers, or fire stations or libraries, etc.

 

• Market Quick Glance

Markets don’t like uncertainty. Never have. Never will. As a result, this contentious presidential campaign has shown an ugly side that has impacted stocks and bond prices all around the globe. The result? The indices have basically been on a downward slide for weeks now— and last week was no different.

At this point in time, it’s anybody’s guess as to how the markets will react to the Tuesday’s election results. Or, whether the indices will end the year in positive or negative territory. One thing we do know, however, is how they fared the last week.

On that note, below are the weekly and 1-year performance results for four popular stock indices along with their respective P/E Ratios. Data according to Bloomberg and based on prices at the close of business on Friday, Nov.4, 2016

-Indices:

-Dow Jones +4.91% YTD down from last week’s 6.47%

• 1yr Rtn +2.28% down from last week’s 5.60%

P/E Ratio 17.05 down from last week’s 17.30

-S&P 500 +3.38% YTD down from last week’s 5.88%

• 1yr Rtn +1.50% down from last week’s 4.51%

P/E Ratio 19.49 down from week’s 19.94

–NASDAQ +1.93% YTD down from last week’s 4.76%

• 1yr Rtn -0.61% down from last week’s 4.10%

P/E Ratio 29.43 down from last week’s 30.64

–Russell 2000 +3.69% YTD down from last week’s 5.83%

• 1yr Rtn -1.55% down from last week’s 3.77%

P/E Ratio 41.25 down from last week’s 41.84

 

-Mutual funds

Below is a quick look at the performance results of the top 5 Lipper Indices. Each index is composed of the top 15 to 30 funds within a Classification.

-Precious Metals Equity

85.84%

-Lipper Pr Metal Eq Fd IX

77.20%

-Latin American Funds

35.43%

-Lipper Glbl Nat Res IX

22.60%

-Commodities Precious Metals

21.64%

Visit www.allaboutfunds.com for more information about 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.

•Cash rules

No matter how popular plastic has become, people still prefer using cash instead of credit or debit cards.

According to a recent Money.CNN.com report that focused on a report by the Federal Reserve Bank of San Francisco’s Cash Product Office, of the 150 billion transaction last year, “Cash was used in 32% of all transactions last year, the highest of any payment method. Spenders used debit cards for 27% of purchases and credit cards 21% of the time.”

Claire Wang, a policy analyst at the San Francisco Fed said, “We still see significant cash preference despite rumors that everyone is switching over to cards.”

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