Monthly Archives: June 2017

pbTrumpBits#12

  • No, they aren’t Mar-a-Lago members but just a few of the millions of people concerned about the future of their health care coverage.

I don’t know about you but I’m sick and tired of hearing our president talk about how disastrous Obamacare is. It’s not disastrous. Believe that and you’ll be believing fake news from the guy who has made and art out of criticizing and blaming others for everything he doesn’t like or care for.

Obama’s ACA has provided health insurance for millions of Americans who did not have any. Plus, it has taken the stress and worries off the shoulders of many who were uninsurable, had pre-existing conditions, etc. etc.

For the record, I know a number of people who are more than thankful to have health insurance because of Obama’s ACA.

But people are one thing. Then  there is the marketplace.

Take a look at how the stocks of companies that fall under the broad healthcare umbrella and you find most—if not all—have rewarded their shareholders and captains of their industries handsomely over the past five years that Obamacare has been in play.

One quick example: For the 5-year period beginning 6/21/12 and ending 6/22/17, the average total return for Health/Biotechnology Funds was 19.04%; year-to-date (12/31/16-6/22/17) mutual funds within that group were up an average of 20.71%.

No disaster there.

So when our Mr. Business President talks about what a disaster Obamacare is, I don’t know where he is getting his facts because a lot of people are grateful for the coverage— albeit they don’t like paying for it but nobody with health insurance premioums to pay does. And, corporate America likes it, too.

For sure the ACA isn’t perfect and needs improving. But dismantle it and you’ll have hell to pay if the current proposal is signed into law.

In Palm Beach county alone, home to the president’s Winter White House,  212,130 people would lose some or all of their Medicaid coverage and benefits.

Now that’s disastrous.

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POCKETBOOK: Week ending June 16, 2017

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  • Income investors

Funny thing about investors—seasoned as well as  newbies. For some reason they imagine, hope for and quite often expect annual returns that just aren’t likely to happen. Call it dreaming. Call it denial. Call it believing a sales pitch. Call it whatever you’d like but it turns out believing less is more is better for your psyche that expecting more and getting less.

But hasn’t expecting less always been a sound route to take in everything life and money related?

On that money score, Lisa Abramowicz wrote a piece for Bloomberg.com titled, “Stop Fooling Yourself About 8% Easy Returns”. The piece focuses on the results of a Legg Mason, Inc. survey of fixed-income investors.

Most were expecting average annual returns of 8.6%. Those still working expected 9%.

Both are in-your-dreams like state of annual return hopes. Unless, of course, your dreams are risky and racy.

Want to maybe be kinda sorta happy with your annual and longer term investment returns—fixed income or otherwise? Then think somewhere in the neighborhood of 5%—give or take.

 

  • Market Quick Glance

Any short-term investor and day trader looking for sound evidence that this market is headed in one direction or another probably understands better than most that each day is a new day. And as such, brings with it new opportunities and financial challenges and rewards.

Long-term investors would be wise to remember that as well.

Below are the weekly and 1-year index performance results— including the dates each reached new highs— according to data from CNBC.com. Data is based on prices at the close of business for the week ending on Friday, June 23, 2017.

-DJIA + 8.26% YTD up a hair from last week’s +8.21%

  • 1 yr Rtn +18.79% down from last week’s 20.59%

The DJIA reached a new all-time high of 21,535.03 on June 20, 2017. (Previous high of 21,391.97 reached on June 14, 2017; before it 21,305.35 on June 9, 2017; 21,225.04 on June 2, 2017; and 21,169.11 on March 1, 2017.)

 

-S&P 500 +8.91% YTD up a hair from last week’s 8.68%

  • 1yr Rtn +15.38% down a chuck from last week’s +17.09%

The S&P 500 reached a new all-time high of 2,453.82 on June 19,2017. (Previous high of 2,446.2 was reached on June 9, 2017. Before that 2,440.23 was reached on June 2, 2017; 2,418.71 reached on May 25, 2017; 2,405.77 reached on May 16, 2017; 2403.87 on May 9, 2017; 2,400.98 reached on March 1, 2017.)

 

-NASDAQ +16.39% YTD up attractively from last week’s +14.28%

  • 1yr Rtn +27.60% up from last week’s 26.97%

The Nasdaq reached its most recent new all-time high of 6,341.7 on June 9, 2017. (Previous highs include: 6,308.76 on June 2; 6,217.34 reached on May 25; 6,170,16 on May 16; 6,133 on May 9, 2017; 6102.72 on May 2, 2017; 6074.04 on April 28, 2017; and 5,936.39 on April 5, 2017.)

 

-Russell 2000 +4.25% YTD up a tidy amount from last week’s +3.65%

  • 1yr Rtn +20.69% down from last week’s +22.52%

The Russell 2000 reached its latest all-time high of 1,433.789 on June 9, 2017. (Previous highs include 1,425.7 reached on April 26, 2017 and of 1,414,82 reached on March 1, 2017.)

 

-Mutual funds

No big change in the average total return for funds that fall under the broad heading of U.S. Diversified Equity Fund. At the close of business on Thursday, June 22, 2017 the average equity fund’s year-to-date return was 7.57%. The previous week’s figure was 7.58%.

Those looking for attractive returns found them in World Equity Funds. Year-to-date the average return for the 4,533 funds under this heading was 15.28%. Wouldn’t you just love to lock a return like that in for the year?

The biggest scorers were India Region Funds, up on average 26.84%; Pacific Ex Japan Funds, 21.83%; China Region Funds, 21.46%;; and International Small/Mid-Cap Growth Funds, at 18.52%.

There are 26 different fund categories under that heading and only three of them had average total returns of under 10%. They were Latin American Funds, 9.61%; Global Multi-Cap Funds, 9.11%; and Global Equity Income Funds, 9.00%.

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.

 

  • This could make you sick

Fingers crossed that the revised health-care plan the Senate has proposed will not get enough votes to pass. If it does, the poor, elderly and sick will become poorer and health care costs and premiums will continue to go up as they always have. Additionally, grandma will likely be asking you if she can move in as a number of those who need full-time care in nursing homes will get the boot.

And don’t believe the way too bleached blonde Kellyanne Conway who says those on Medicaid who lose health care coverage can always get a job with a company that has health insurance and will cover them. That’s just plain poppycock and simply not true. It’s also a perfect example of how out of touch this White House and its administration is with millions upon millions of people who make up our population in America.

So, if you’re looking for some startling data on where in the country and in which states a repeal of Obamacare would impact people the most, BusinessInsider.com can help. In a story titled, “MAP: Areas of the US where an Obamacare repeal would hit the heardest”, are two maps worth looking at.

In one map you will see the areas in the U.S. where a repeal of Obamacare would impact people the most. In the second is a state by state look. Do check out both.

The story and the maps can be found here: http://www.businessinsider.com/where-obamacare-repeal-would-hit-the-hardest-map-2017-6

 

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pbTrumpBits#11

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This is the front gate of Trump’s private club Mar-a-Lago in Palm Beach. If you expected golden gates, you’d be mistaken. Nothing much special–or golden– about them, except  for the $200,000 membership fee it costs to pass through them. And, that they are in need of repair.

Kinda, sorta, not exactly but some might say,  a part-time plunder.

No matter whose numbers you believe, or how much you love or loathe the 45th president of these United States, you’ve got to admit that his Mar-a-Lago private club is one cash cow.

Figures released this week indicate that Trump’s Palm Beach golden nugget brought in somewhere between $20 million to $37.5 million  over a 15-month period ending this spring.

That’s one heck of a chunk of change for a part-time gig. Yes, you read that correctly—the club is only open seasonally.

No doubt there are thousands of U.S. private company owners who can only dream of bringing in revenues of $20-38 million in one year. One full, 12-month calendar year.

Oh well.

And then there is the back door: While the front gates of Mar-a-Lago are closed, the back ones aren’t.

 

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POCKETBOOK: Week ending June 16, 2017

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  • Inflation

About as sneaky as sneaky can get, inflation quietly reveals itself over time and steals our money in plain sight and right before our very eyes. Now that I think of it, it’s kind of like aging: One day we are young and then what seems like the next day our skin has sagged and wrinkles appear to have come out of nowhere. But they haven’t, day by day, year by year we have grown older and aged in plain site and right before our very eyes.

If I were smart, I’d use the rest of this entry to sell you an amazing stay-young-forever youth cream that comes with an instant bonus pack of how to fight inflation, but I haven’t created that cream just yet. As for inflation, it is something you can prepare for.

Recently, MyBudget360.com had a piece that addressed the four horsemen of inflation; college tuition, medical care, hosing and stagnant wages. I can think of a few others, but it’s there story.

Basically, what each of us needs to remember is that as time goes on, the reason our money doesn’t go as far as it used to is because of inflation’s sublte way of destroying the purchasing power of our dollars. The results—-it takes more dollars to buy goods and services. Anyone remember when a cup of coffee cost 25 cents and refills were free?

So if you’re a teachable moment kind of person, the very best thing an adult can teach a child, friend or loved one is to save, save, and save a portion of every dollar that comes their way for a future that’s guaranteed to cost more than the past.

 

  • Market Quick Glance

It’s a go-figure kind of market for equity enthusiasts.

While there is not much more to say on that score, readers here would b wise to remember these two things: One, don’t fight the trend. And two, trees don’t grow to the sky.

Below are weekly and 1-year performance results— including the dates each reached new highs— according to data from CNBC.com. Data is based on prices at the close of business for the week ending on Friday, June 16, 2017.

-DJIA + 8.21% YTD up from last week’s +7.64%

  • 1 yr Rtn +20.59% up from last week’s 18.27%

The DJIA reached a new all-time high of 21,391.97 on June 14, 2017. (Previous highs include: 21,305.35 on June 9, 2017; 21,225.04 on June 2, 2017; and 21,169.11 on March 1, 2017.)

-S&P 500 +8.68% YTD up a hair from last week’s 8.62%

  • 1yr Rtn +17.09% up from last week’s +14.95%

The S&P 500 reached a new all-time high of 2,446.2 on June 9, 2017. (Previus highs include 2,440.23 reached on June 2, 2017; 2,418.71 reached on May 25, 2017; 2,405.77 reached on May 16, 2017; 2403.87 on May 9, 2017; 2,400.98 reached on March 1, 2017.)

-NASDAQ +14.28% YTD down from last week’s +15.32%

  • 1yr Rtn +26.97% up from last week’s 25.19%

The Nasdaq reached its most recent new all-time high of 6,341.7 on June 9, 2017. (Previous highs include: 6,308.76 on June 2; 6,217.34 reached on May 25; 6,170,16 on May 16; 6,133 on May 9, 2017; 6102.72 on May 2, 2017; 6074.04 on April 28, 2017; and 5,936.39 on April 5, 2017.)

–Russell 2000 +3.65% YTD down from last week’s +4.76%

  • 1yr Rtn +22.52% up from last week’s +20.36%

The Russell 2000 reached its latest all-time high of 1,433.789 on June 9, 2017. (Previous highs include 1,425.7 reached on April 26, 2017 and of 1,414,82 reached on March 1, 2017.)

 

-Mutual funds

The average U.S. Diversified Equity Fund lost ground last week as at the close of business on Thursday, June 15, 2017 the average equity fund’s year-to-date return was 7.58%. The previous week’s figure was 7.90%.

Each week, Lipper provides performance figures for the 25 Largest Mutual Funds. Largest meaning funds with the most dollars invested in them as based on their total net assets.

Curiously, of the 25 funds on that list of biggies, 14 of them are from Vanguard. Seems as though the sales pitches from that family best known for its low-cost cost of ownership has worked.

The largest of the Vanguard funds in that list is the Vanguard 500 Index: Admiral fund with $203,021.6 million in assets as of May 31,2017. Although that fund is second in assets size—the SPDR S&P 500 ETF has more in assets at 235,791.8 million.

But, having a lot of assets in a fund doesn’t necessairly translate into top performance figures.

Big fat funds rewarding their shareholders the most, as of June 15, 2017, include the Fidelity Contrafund, up 17.05%; the Vanguard Total 1 Stock Fund; Inst, up 13.98%; and Vanguards Total 1 Stock fund; Inv, up 13.92%.

The three big funds with the lowest returns include Vanguard’s Total Bond 11 : Investor fund, up 2.715, the Vanguard Total Bond 11: Admiral fund, up 2.76% and the Dodge & Cox Stock fund up 6.06&.

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.

 

  • Millionaires love owning stocks.

Robert Frank writes about all things wealth-related for CNBC. In a recent piece titled, ” Millionaires own a record 45% of the world’s weath—and their share is growing, “ comes these little tidbits:

  • Research from that 45% piece was based on data from the Boston Consulting Group.
  • America has the most millionaires—over 7 millionaire households.
  • Multimillionaires are the biggest wealth winners of all and they expect that pot to get fatter—8.4% fatter by 2021.

 

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POCKETBOOK: Week ending June 9, 2017

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  • A correction on its way?

 The fine folks at the Bespoke Investment Group have a way of clarifying all things market related using historic facts and figures.

From them comes this bundle of S&P goodies that may or may not help you with your investing goals and expectations:

  • The S&P 500 hasn’t had a 10% correction in the last 16 months.
  • The current rally has lasted 477 calendar days making it the 11th longest run for that index without a 10% correction since 1928.
  • If you think that the S&P 500 is going to continue the rally and hope it becomes one of the longest running rallies around, it needs to run another 173 days.
  • To pull that off, this rally would have to go on past Thanksgiving.

Looks like enthusiastic S&P 500 bulls need to think “turkey trot”.

BTW, Bespoke also reported that when a correction does come along after rallies lasting  10 years or more, the decline has been  15.7% over 142 days. “Compared to all corrections since 1928 where the average decline was 19.5%,…”

 

  • Market Quick Glance

Believe it or not, the S&P 500 and the NASDAQ were both down from their previous week’s close and their 1-year returns were down as well. That means the star performing index turned out to be the Russell 2000—it was up on both scores.

Depending upon which money guru you read or take the advice of, the bull market in equities is getting a little long in the tooth or still has plenty of space to run.

Below are weekly and 1-year performance results— including the dates each reached new highs— according to data from CNBC.com. Data is based on prices at the close of business for the week ending on Friday, June 9, 2017.

 

-DJIA +7.64% YTD up from last week’s +7.30%

  • 1 yr Rtn +18.27% down from last week’s 19.08%

The DJIA reached a new all-time high of 21,305.35 on June 9, 2017. That’s one week after the 21,225.04 high reached on June 2, 2017. (Previous high of 21,169.11 was reached on March 1, 2017.)

 

-S&P 500 +8.62% YTD down from last week’s 8.90%

  • 1yr Rtn +14.95% down from last week’s +16.15%

The S&P 500 reached a new all-time high of 2,446.2 on June 9, 2017. That’s one week after the 2,440.23 reached on June 2, 2017. (Previous highs of 2,418.71 was reached on May 25, 2017; the high of 2,405.77 was reached on May 16, 2017; the high of 2403.87 was reached on May 9, 2017; and the a high of 2,400.98 was reached on March 1, 2017. )

 

 

-NASDAQ +15.32% YTD down from last week’s +17.14%

  • 1yr Rtn +25.19% down from last week’s 26.84%

The NASDAQ reached another new all-time high of 6,341.7 on June 9, 2017. (Some of the other previous highs include:6,308.76 on June 2; 6,217.34 reached on May 25; 6,170,16 on May 16; 6,133 on May 9, 2017; 6102.72 on May 2, 2017; 6074.04 on April 28, 2017; and 5,936.39 on April 5, 2017.)

 

–Russell 2000 +4.76% YTD up from last week’s +3.56%

  • 1yr Rtn +20.36 % upfrom last week’s +20.06%

The Russell 2000 reached a new all-time high of 1,433.789 on June 9, 2017. (Previous high of 1,425.7 was reached on April 26, 2017 and before that a high of 1,414,82 was reached on March 1, 2017.)

 

-Mutual funds

The average U.S. Diversified Equity Fund was up a tad from the previous week. So, at the close of business on Thursday, June 8, 2017 the average equity fund’s year-to-date return was 7.90%. The previous week’s figure was 7.56%.

Once again, the top performance categories under that heading are beginning to sound like a broken record—with one exception: the order has changed. The top performing group was Equity Leverage Funds, up 17.47 ahead of Large-Cap Growth Funds up 17.21% followed by Multi-Cap Growth Funds, up 15.77%

For a second week in a row the average Sector Fund return barely budged and ended the week up 4.79% a hair about the previous week’s close of 4.78%.

It is still a Global Science/Technology Funds world, up 27.58%. And Commodities Energy Funds continued to lose more ground with the average fund -19.37% ( previous week the figure was -16.07%).

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.

 

  • Rate hikes

The Fed is expected to raise rates by 25 basis points—that translates to one-quarter of one percent.

That means life has gotten more expensive for anyone with an adjustable mortgage or home equity line of credit, or who is applying for a new mortgage, car loan or has with credit card debt that isn’t paid off in full each month.

It also means banks will be getting more of your money should you have any of the relationships mentioned above in place.

Unfortunately, an interest rate increase like that won’t mean much for savers who earn interes on their savings accounts.

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POCKETBOOK: Week ending June 2, 2017

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  • About us

Each week I receive Jonathan Clements’ Humble Dollar newsletter. Data from a recent one included stats from a 2016 General Social Survey that shows how much attitudes about our financial lives have changed over 44 years.

Here’s what that survey revealed:

-“30% of Americans said they were very happy in 2016, unchanged from the 30% who described themselves that way in 1972. Over this 44-year stretch, inflation-adjusted per capita disposable income rose 120%. More money, it seems, hasn’t bought happiness.”

-“29% of Americans were satisfied with their financial situation, versus 32% in 1972. Meanwhile, the percentage who aren’t at all satisfied has climbed from 23% in 1972 to 27% in 2016.”

-“31% of Americans felt their incomes were below average or far below average, compared with 24% in 1972.”

-“58% agreed or strongly agreed that they had a good chance of improving their standard of living, versus 72% in 1987.”

If you’re a survey results believer, it seems like those of us who have been around for a while were  financially happier in ’72 than we are today.

 

  • Market Quick Glance

It was a week of new all-time highs reached for the  DJIA, S&P 500 and NASDAQ but not  the Russell 2000. The Russell did, however, see a nice move upward in its year-to-date performance.

For the past few weeks I’ve been pointing out that the 1-year return figures have been worth watching and I’ll say the say the same this week. Even though most saw gains, they were modest at best. Any trend seekers might want to keep their eyes on that longer view for no other reason, perhaps, than to have something to talk about.

Although the 1-year return for our major indices are attractive, they pale in comparison with that of the Caracas Stock Exchange, Caracas General: Its year-to-date return through June 2, 2017 is + 146.46% and for 1 year is up 403.44%.

Below are weekly and 1-year performance results— including the dates each reached new highs— according to data from CNBC.com. Data is based on prices at the close of business for the week ending on Friday, June 2, 2017.

-DJIA +7.30% YTD up from last week’s +6.67%

  • 1 yr Rtn +19.08% up from last week’s 18.24%

The DJIA reached a new all-time high of 21,225.04 on June 2, 2017. (The previous high of 21,169.11 was reached on March 1, 2017.)

 

-S&P 500 +8.90% YTD up from last week’s 7.91%

  • 1yr Rtn +16.15% up from last week’s +15.58%

The S&P 500 reached a new all-time high of 2,440.23 on June 2, 2017. (Its previous high of 2,418.71 was reached on May 25, 2017. Prior to that, the previous high of 2,405.77 was reached on May 16, 2017. Before that the high of 2403.87 was reached on May 9, 2017and before that, the a high of 2,400.98 was reached on March 1, 2017. )

 

-NASDAQ +17.14% YTD up from last week’s +15.36%

  • 1yr Rtn +26.84% up a tad from last week’s 26.69%

The Nasdaq reached another new all-time high of 6,308.76 on June 2, 2017. (Its previous all-time high of 6,217.34 was reacged May 25, 2017. Then before that a high of 6,170,16 was reached on May 16, 2017; the high of 6,133 was reached on May 9, 2017; a high of 6102.72 was reached on May 2, 2017; 6074.04 on April 28, 2017; and 5,936.39 hit on April 5, 2017.)

–Russell 2000 +3.56% YTD way up from last week’s +1.85%

  • 1yr Rtn +20.06 % down from last week’s +21.28%

The Russell 2000 reached a new all-time high of 1,425.7 on April 26, 2017.

(Its previous high of 1,414,82 was reached on March 1, 2017.)

 

-Mutual funds

As you might expect, the year-to-date return for the average U.S. Diversified Equity Fund was up from the previous week. This, thanks to the new highs reached by equity prices. So, at the close of business on Thursday, June 1, 2017 the average equity fund’s year-to-date return was 7.56%, up a healthy amount from the previous week’s figure of 6.70%.

The top performance categories under that heading are beginning to sound like a broken record a Large-Cap Growth Funds continued to lead the way, now up 16.40 %—that week the figure was15.59%. Once again behind it were Equity Leverage Funds, up 16.02% (last week it was15.26%) and then followed by Multi-Cap Growth Funds, up 15.14% (last week’s figure was14.17%).

While the average Sector Fund return barely budged, it ended the week up 4.78% a breath above the previous week’s figure of 4.77%.

That said, Global Science/Technology Funds continued to lead the performance game, up on average 25.29% ( last week’s figure was 24.73%) while Commodities Energy Funds lost more ground during the week with an average return of -16.07% ( the previous week the figure was -13.72%.)

It continues to be the wide great big world that we live in where the most money looks like it’s being made. The average return for the 4,495 funds that fall under the World Equity Funds heading were up 15.48%–that’s up from last week’s 15.01%.

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.

 

  • Is a June Swoon on the way?

Wall Street seers have always had a way of coming up with clever ways to describe the investment world. A world in which making heads or tails about what’s going can only be read in a rearview mirror.

With May behind us, so goes the “Sell in May and go away” quip and in comes the “June swoon”.

In 30 days we will know if there is any truth to that little ditty.

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