POCKETBOOK: Week ending Oct. 13, 2017

FullSizeRender(31)•The Donald’s Pinocchio nose

If our current president had a Pinocchio nose, well, I can hardly imagine how extended it would by now be given his record of telling the truth while President of the United States. Day-to-day tweets and truth-telling during his time in office haven’t gone hand in hand.

Take for instance, this example from Trump tweet dated Oct. 16, 2017: “Since Election Day on November 8, the Stock Market is up more than 25%, unemployment is at a 17 year low & companies are coming back to U.S.”

Looking only at stocks, aaccording to MarketWatch.com, if one defines “the Stock Market” as the DJIA, the president is accurate. But if the market he’s speaking of is the S&P 500, he’s off. It hasn’t gained that much. FactSet reports that index up 22%.

That little half truth will extend his Pinocchio nose a little bit more.

But let’s go back to that DJIA. Some stocks in it have performed incredibly well since his inauguration. But not all. The top three total return performers from Nov.8 through Oct.13 were Boeing(BA) up 88%, Caterpillar (CAT) up 58% and McDonald’s (MCD) up 43%, according to FactSet.

The three worst total return performers over that same time period  were: General Electric, (GE) down 19%, International Business Machines (IBM) down 2 % and Exxon Mobil (EX) down 1 %.

Forgetting stocks, a bigger not-telling-the-truth story from Trump is his one about tax cuts. Lots of fudging in what’s being said there including the fact that salaries will increase by thousands of dollars each year for worker bees. Hog wash.

And so is the need for tax cuts in the first place. One simple reality: Think for a moment of all the expenses and costs that are being racked up because of the hurricanes, storms, fires, etc. that have happened over the past few weeks. Where is all of the billions of dollars going to come from to cover those costs? Not tax cuts.

The Republicans say that we need tax reform for one reason and one reason only: For the Republican Party to be able to say they have accomplished something.

Your average American needs tax reform about as much as they need to see the president’s  Pinocchio nose grow another inch.

 

  • Market Quick Glance

Truly remarkable. As of last Wednesday, the DJIA had enjoyed 53 record high closes this year, according to CNBC. The S&P 500, 62 times. And then Friday rolled around and both indices closer higher again.

Is there no ending to this bull run? Yes and no. Yes, bulls always trip and markets always turn. No, no precise way of knowing when or what triggers the fall.

Below are the weekly and 1-year index performance results for four major indices— including the dates each reached new highs—according to CNBC.com based on prices at the close of business on Friday, October 20, 2017.

-DJIA +18.04% YTD up significantly from last week’s 15.73%.

  • 1 yr Rtn +28.44% up from last week’s 26.37%

And another new all-time high for the DJIA. This one of 23,328.84 was reached on October 20, 2017.

The previous high of 22,905.33 was reached on October 13, 2017.

On March 1, the Dow stood at 21,169.11.

 

-S&P 500 +15.02% YTD up from last week’s 14.04%.

  • 1yr Rtn +20.26% up from last week’s +19.72%

The S&P 500 reached its latest new high of 2,575.33 on October 20, 2017.

Its previous high of 2,556,65 was reached on week earlier on October 13, 2017.

On March 1, 2017, that index stood at 2,400.98.

 

-NASDAQ +23.15% YTD up from last week’s +22.71%.

  • 1yr Rtn +26.46% down from last week’s 26.71%

The Nasdaq reached a new all-time high of 6,640.03 on October 20, 2017.

Its previous high of 6,,616.58 was reached on October 13, 2017.

On April 5, 2017 the index closed at 5,936.39.

 

-Russell 2000 +11.21% YTD up from last week’s +10.72%.

  • 1yr Rtn +23.73% up considerably from last week’s +23.60%

The Russell 2000 reached a new all-time high of 1,514.94 on October 20, 2017.

Its previous high of 1,514.94 was reached on October 5, 2017.

On March 1, 2017 this index stood at 1,414,82.

 

-Mutual funds

Average year-to-date returns up once again.

The year-to-date average cumulative total reinvested return for equity funds falling under the broad U.S. Diversified Equity Funds moved up a bit when posted at the close of business on Thursday, October 19, 2017 and  stood at 13.75%, accord to Lipper. The previous week the return was 13.54%.

Comparing this week’s Thursday figures to last week’s, the average Sector Fund had a year-to-date total return of 9.53%, down a bit from the week earlier figure of 9.83%.

This week, the two fund types with y-t-d average figures of over 30% were the same fund types—Global Science & Technology funds up on average 39.47% ( last week’s figure 39.38%) and your basic Science & Technology funds, +32.39% ( up from last week’s figure of 32.01%).

World Equity Funds were down a hair from where they were last week at 24.44%, the week previous the figure was 24.54%. Four of them still had year-to-date average returns up over 30%: China Region Funds at +38.39% and down from last week’s +39.04; Pacific Ex-Japan Funds, 33.82% also down from last week’s +33.61%; India Region Funds, +32.32% up from last week’s+32.05; and Latin American Funds, +30.39% down from last week’s 30.94%.

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.

 

  • IPO advice

 When I was a broker, getting in on a hot IPO was something many investors clamored to do in hopes of making some quick bucks  knowing well in advance that the likelihood of their orders being filled wasn’t guaranteed.Of course, that was during the last century.

Today, astute investors have learned that jumping on a company’s IPO gun before it fires can backfire. Especially if the company has no profits before going public.

To minimize that kind of IPO risks, Investor’sBusinessDaily offers these smart and common sense tips for IPO wannabees:

  • Don’t buy an IPO stock until it forms and breaks out of its first base.
  • Focus on profitable companies showing technical strength.
  • Cut losses short if the trade goes against you.

 

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