High on stocks
Some sources report it’s the “dumb money” that’s bought most seriously into the Trump Bump party on Wall Street. The “smart money” folks, (they are considered to be the professional money managers and not the ordinary everyday “dumb money” investor), are apparently said to be sitting with more cash, on the sidelines, rebalancing portfolios and well aware that investing comes with risks. Extended bull markets and frothing highs being two of them.
Market highs are one thing, the likelihood of a market correction is quite another. But without an accurate crystal ball, it’s pretty tough telling the short-term future.
One future that’s had a rewarding past and not gone up in smoke could be cannabis stocks. While there are mixed messages coming out of Washington with respect to cannabis, one industry-related Canadian stock has provided the kind of highs its investors enjoy.
Canopy Growth (OTCPL:TWMJF) is Canada’s largest grower of weed. Over the past year the stock is up over 245% and grew its revenues by 180% during the most recent quarter, according to Jason Hamlin, a SeekingAlpha contributing columnist. Hamlin thinks that there is room for this company to grow.
While the high is appealing, there is plenty of smoke surrounding this relatively new company. Considered the largest non-pharmaceutical marijuana stock in the world, TWMJF closed Friday, (3/10/17), at $8.07 and over the past 52-weeks has traded as low as$1.84 and high as $14.39.
Whether pot is a smart money or dumb money play, is anybody’s guess. Unless, of course, you are in the business.
Market Quick Glance
A chink in the armor?
Look at the year-to-date and 1-year returns on the four stock indices followed here show some changes: Returns are lower, albeit not by much, but still lower.
As we enter the Ides of March week, words out of Washington regarding the debt ceiling and direction of interest rates could signal more moves in a southerly direction. We shall see come next Friday.
Below are the weekly and 52-week performance results— including the dates each has reached its high according to data from CNBC.com. Data is based on prices at the close of business for the week ending March 10, 2017.
-Dow Jones +5.77% YTD, down from last week’s 6.29%
- 1yr Rtn +22.99% down from last week’s 23.97%
The DJIA reached an all-time high of 21,169.11 on March 1, 2017.
-S&P 500 +5.97% YTD down from last week’s 6.44%
- 1yr Rtn +19.25% down from last week’s +19.55 %
The S&P 500 reached an all-time high of 2,400.98 on March 1, 2017.
-NASDAQ +8.89% YTD down from last week’s +9.06%
- 1yr Rtn +25.73% up a lot from last week’s 24.71%
The Nasdaq reached an all-time high of 5,911,79 on March 1, 2017.
–Russell 2000 +0.60 YTD% down from last week’s +2.73 %
- 1yr Rtn +28.32% down from last week’s +29.56%
The Russell 2000 reached its all time high of 1, 414.82 on March 1, 2017.
Slip sliding away.
The average total return for U.S. Diversified Equity Funds closed at 4.06 % at the close of business on Thursday, March 9, 2017, according to Lipper. That’s down from the previous week’s close of 5.22%.
There are 8,518 funds that make up the U.S. Diversified Equity Funds broad heading that includes 20 different types of funds from various cap and strategy funds to Equity Leverage and Alternative Active Extension Funds.
But there’s more in the Lipper’s weekly performance report than U. S. diversified Equity Funds. Other headings include: Sector Equity Funds, 2,310 funds fall under this heading with roughly 27 different fund types included in it. At the close of business on Thursday, the average Sector Equity Fund was up 1.88?
World Equity Funds were up on average 5.56 %, with 4.518 funds falling with its 26 different types.
Add all the funds falling under those three large categories of funds together and for those 15,346 funds, their average YTD return was 4.16%.
Makes you kinda wonder what the birthday parties and Trump Bump celebrations are all about as 4.16% is nothing to really crow much about.
That said, any plus-side return is better than a minus.
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.
Here’s a thought about the jobs situation in the US that may make you rethink a thing or two. I received it last week from PNC Bank’s Florida and Texas Economists Mekael Teshome and Kurt Rankin respectively: “Job growth has averaged 196,000 over the past year, but is unlikely to maintain that pace throughout 2017. The issue is not one of demand for workers, but supply; it is unclear how many people there ae still standing on the sidelines who can come back into the workforce.