Monthly Archives: January 2018

POCKETBOOK: Week ending Jan. 19, 2018

IMG_0338

  • Government shutdowns

It’s Monday, January 22, and  Day 3 of our government shutdown.

Based on history, and likely your common sense, the longer the shutdown, the more impact it has on everything from stock market returns to the economy and perhaps even your life.

Looking back, CNN.com reports that the 16-day shutdown five years ago, in 2013, was the costliest in our history: “$20 billion, according to an estimate from Moody’s Analytics.”

That said, should the current shutdown go on for that same amount of time, the pros don’t think the results would be as costly because our economy is in much better shape than it was in 2013.

We shall see.

  • Market Quick Glance

And more high scores for stocks prices last week as three of the four indices followed below hit new all-time highs on Friday and one—the DJIA—on Thursday.

I’ve heard from more than one professionally reliable source that stock prices are likely to continue their current upward trend through earnings season—like May. Provided, of course, nothing out of the ordinary happens.

But something already out of the ordinary has happened—a government shutdown. So, take that projection with the mixture of a grain or two of salt and reality.

Re the current market environment, another source reminded me of the huge impact a rising interest rate environment has on stocks. In short, the higher interest rates move, the more unattractive stocks become.

In other words, an increase in interest rates translates into fixed-income returns with  higher yields positively impacting income-focused investors. It also means less attractive returns on things like utility and dividend paying stocks and more money to financial institutions.

Given that change is the current and future name of the investing game, the stock market has been living in a low-interest rate heaven for years now and rewarding stock investors delightfully for longer than anyone could have imagined eight or nine years ago.

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, Jan. 19, 2018.

DJIA +5.47% YTD up from last week’s 4.39%

  • 1 yr Rtn +32.13% up from last week’s 29.72%

Ho hum, a new high for the DJIA was reached again this year on January 18, 2018 of 26,153.42. The previous high was reached on January 12, 2018 then 25,810.43.

-S&P 500 +5.11% YTD up from last week’s 4.21%

  • 1 yr Rtn +24.15% up from last week’s 22.72%

A new high for the S&P 500 Index was reached on January 19, 2018 of 2810.33. The previous high was reached on January 12, 2018 of 2,787.85.

-NASDAQ +6.27 YTD up from last week’s 5.18%

  • 1yr Rtn +32.42% up a pinch from last week’s 30.89%

Nasdaq hit another new high on January 19, 2018 of 7,336.38. The second new high for this index was reached on January 12, 2018 of 7,265.26.

-Russell 2000 4.05%YTD up lots from last week’s 3.68%

  • 1yr Rtn +16.97% up a lot from last week’s +13.71%

The Russell 2000 reached another new all-time high on January 16, 2018 of 1,604.02. The previous high was reached on January 12, 2018 of 1,598.18.

 

-Mutual funds

More gains.

On Thursday, January 18, 2018, the year-to-date average cumulative total reinvested returns for equity funds that fall under the broad U.S. Diversified Equity Funds heading was 3.87% at the close of business on Thursday, January 18, 2017, according to Lipper. That’s up from the previous week’s figure of 3.33%.

Three fund types enjoying a positive new year under that broad heading include:

-Equity Leverage Funds, +8.37 %

-Large-Cap Growth Funds, +6.06%

-Multi-Cap Growth Funds, +5.59%

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.

 

  • ETF Investing 24 hours a day

Once upon a time, when I was a broker and for decades before that, the stock exchanges had fixed hours that they were open. Investing on Internet platforms didn’t exist back then. Neither did things like dot com stuff, iPhones or anything “i” related.

Today things have changed dramatically  and investors can purchase shares before and after traditional market hours, currently 9:30-4:00

Now, TD Ameritrade has changed all that and beginning today that online brokerage firm offers 24-hour trading possible for ETFs.

While that may sound super-duper to some, the most important part of this story is that it comes with a caveat worth remembering: “The problem with trading equity around the clock is there’s not that much demand to keep a natural supply-demand balance, “ Larry Tabb of The Tabb Group says. “Small amounts of supply and demand can really move prices, so you have to be careful.”

Again, remember that.

-30-

 

Advertisements

POCKETBOOK: Week ending Jan. 12, 2018

 

img_4143.jpg
Thank You, Dr.King.

 

  • A Rich Market

No two ways about it, last week stock prices continued on their upward tear.

With that fact behind us, consider the following SeekingAlpha.com piece from Victor Dergunov of Albright Investment Group:

  • U.S stocks are quite expensive relative to most other countries by historical standards.
  • The S&P 500s Shiller P/E ratio is about 34, more than double its median ratio of 16 and has only been higher one time in history—at the height of the dotcom boom.
  • The price-to-sales ratio for the S&P 500 is at an all-time high, 2.35—the media is 1.44 “suggesting that stock prices are rising relative to revenue growth faster than at any other time throughout history.”

We all know stock prices, indices, charts don’t always go up and that that upward trend will turn south sometime. But until it does, do enjoy the ride.

 

  • Market Quick Glance

And it was another extremely rewarding week for equities. Of the four indices followed here, all reached new highs—each gaining roughly 2 percent! That’s a remarkable start for any year.

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, Jan. 12, 2018.

DJIA +4.39% YTD up lots from last week’s 2.33%

  • 1 yr Rtn +29.72% up from last week’s 27.12%

A new high for the DJIA was reached on January 12, 2018 of 25,810.43. Its previous high was reached one week earlier, on January 5, 2018 of 25,299.79.

 

-S&P 500 +4.21% YTD up lots from last week’s 2.60%

  • 1 yr Rtn +22.72% up from last week’s 20.92%

A new high for theS&P 500 Index was reached on January 12, 2018 of 2,787.85. Its previous high was reached one week earlier on January 5, 2018 of 2,743.45.

 

-NASDAQ +5.18 YTD up a heap from last week’s 3.38%

  • 1yr Rtn +30.89% up a pinch from last week’s 30.04%

Nasdaq its second new high of this year on January 12, 2018 of 7,265.26. Its previous new high was reached on January 5, 2018 of 7,137.04.

 

-Russell 2000 +3.68%YTD up lots from last week’s 1.60%

  • 1yr Rtn +16.97% upa lot from last week’s +13.71%

The Russell 2000 reached a second new all-time high of January 12, 2018 of 1,598.18. Its previous high was 1,560.84 reached on January 4, 2018.

 

-Mutual funds

More gains.

On Thursday, January 11, 2018, the year-to-date average cumulative total reinvested returns for equity funds that fall under the broad U.S. Diversified Equity Funds heading was 3.33%. That’s up a hike from the previous week’s figure of 1.64%.

Three fund types not enjoying a positive new year include:

-Dedicated Short Bias funds, down on average -5.69%

-Real Estate Funds, -3.75%

-Utility Funds, -2.32%

Place your bets now as to whether that trend will continue for each knowing in advance that the direction of interest rates plays a big part in the relative performance of both real estate and utility funds.

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.

 

  • Compound It

As a big fan of dividend-paying stocks, I can’t think of any reason not to reinvest the dividends the stocks in your portfolio pay back into those companies.

Remember, compounding works the same no matter how much money you are working with—a few bucks or millions.

Its rewards come to you based on percentages and time—the percentage rate that’s paid and the amount of time the security is held hence allowing the reinvested dividend to work for you.

 

-30-

 

 

 

 

 

 

POCKETBOOK: Week ending Jan. 5, 2018

  • img_4112.jpg
  • Dogs of the Dow 2018

I’m a big fan of dogs. And dividends. Both are rewarding in oh-so many ways. And, can provide us with some of life’s finest simple pleasures—- faithful companionship and income.

With that in mind, below are this year’s Dogs of the Dow. Lest you think this investment strategy  (basically purchasing the shares of the 10 stocks of the DJIA 30 that pay the highest dividends ), isn’t worth your time, think again.

Yes, it’s true that in 2017, the Dogs’ return of 19% didn’t match or beat that of the 25% return of the DJIA,  but 19% is nothing to turn your nose up at no matter what market conditions are.

That said, below are the 2018 Dogs of the Dow, according to DogsoftheDow.com:

Verizon 4.5%
IBM 3.9%
Pfizer 3.8%
ExxonMobil 3.7%
Chevron 3.5%
Merck 3.4%
Coca-Cola 3.2%
Cisco Systems 3%
Procter & Gamble  3%
General Electric  2.8%

FYI: New to the pack of 10 this year are Procter & Gamble and General Electric.

  • Market Quick Glance

After a year in which the equity market indices continued to make new highs and new highs and new highs, many investors were smiling all the way to the bank. That said, during the last week of 2017, all four indices followed below lost ground. Not a lot of ground—but all wound up lower than they had at the end of the previous week.

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, Jan. 5, 2018.

DJIA +2.33% YTD

  • 1 yr Rtn +27.12% up from last week’s 24.72%

A new high for the DJIA was reached on January 5, 2018 of 25,299.79. Its previous high was reached on December 18, 2017 of 24,876.07.

-S&P 500 +2.60% YTD

  • 1 yr Rtn +20.92% up from last week’s 18.87%

A new high for the S&P 500 Index was reached on January 5, 2018 of 2,743.45. The S&P 500 reached its previous new high on December 18, 2017 of 2,694.97.

-NASDAQ +3.38% YTD

  • 1yr Rtn +30.04% up from last week’s 27.09%

Nasdaq reached a new high on January 5, 2018 of 7,137.04. Its previous new high of 7,003.89 was reached on December 18, 2017.

-Russell 2000 +1.60%YTD

•1yr Rtn +13.71% up from last week’s +12.64%

The Russell 2000 reached a new all-time high of 1,560.84 on January 4, 2018. Its previous new all-time high was reached on December 4, 2017 of 1,559.61.

-Mutual funds

After a financially rewarding year for many mutual fund shareholders, on Thursday, January 4, 2018, the year-to-date average cumulative total reinvested returns for equity funds that fall under the broad U.S. Diversified Equity Funds heading was 1.64%.

As a point of reference, on the day before the 2017 trading year ended, Thursday, December 28, 2017, the average return was for this fund category was 18.91%. All data figures according to Lipper.

Below are fund types with a weekly performance that screeched out of the box in this new year:

  • Equity Leverage Funds, up on average +4.20.

FYI: This group had the BEST average return for fund types that fall under the U.S. Diversified Equity Funds in 2017 of +42.86%.

  • Energy MPL Funds, up on average +4.16%.

FYI: This group was the WORST average return for fund types that fall under the Sector Equity Funds heading in 2017 of -5.95%.

  • China Region Funds, up on average +3.74%.

FYI: This fund group had the BEST average return for funds that fall under the World Equity Funds heading in 2017 of +43.34%.

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.

 

  • Investing round the world.

I’m a keeper of lots of paper stuff. Lots. The other day one of the items I ran across was a chart from Thornburg Investment Management. It was a Country Indices chart showing the annual return of 20 different countries from 1995 through 2004.

Given that country investing was rewarding for many investors in 2017—world equity funds, for example, were up over 22% on average—here’s a 20-year look back at what the top three performing countries were in 1997. And then in 1998.

In 1997, the top country performers were: Switzerland, +44.84%; Italy, +36.38%; and US, +34.09.

And in 1998, the top country performers were: Korea, +141.15%, Belgium, +68.73%; and Italy, +53.20%. (The US came in in sixth place that year, up +30.72%.)

Since it’s always been and will continue to be a changing world, and, that history has a way of repeating itself in that ever-changing environment, figured the above might be an interesting read.

Wishing you much investing luck in 2018 wherever you decide to place your bets.

-30-

 

 

 

 

 

POCKETBOOK: Week ending Dec. 29, 2017

  • file0002132358706
  • Not every stock makes money

One of the honest-to-goodness realities of investing in stocks is that all stocks don’t make their shareholders money. In fact, every year—including in 2017— there are some winning doozies and some losing doozies.

Louis Navellier, in a recent email, included a listing of companies in which shares lost money and were on his “sell” list in 2017. Some included General Electric, down -43%, AmTrust Financial Services, down 63% and L Brands, down -44%.

Some of the winners on his “buy” list included TSL Education Group, up 150%, Align Technologies, up 146% and Burlington Stores, up 30%.

The way I see it, if your investments were up 10% or more, consider it a profitable year.

Wishing you another lucky year in 2018.

 

  • Market Quick Glance

After a year in which the equity market indices continued to make new highs and new highs and new highs, many investors were smiling all the way to the bank. That said, during the last week of 2017, all four indices followed below lost ground. Not a lot of ground—but all wound up lower than they had at the end of the previous week.

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, Dec. 29, 2017.

DJIA +25.08% YTD down from last week’s 25.26%.

  • 1 yr Rtn +24.72% up from last week’s 24.27%

The last new high for the DJIA was reached on December 18, 2017 of 24,876.07.

 

-S&P 500 +19.85% YTD down from last week’s 19.85%.

  • 1yr Rtn +18.87% up from last week’s +18.68%

The S&P 500 reached its latest new high on December 18, 2017 of 2,694.97.

 

-NASDAQ +28.24% YTD down from last week’s +29.29%.

  • 1yr Rtn +27.09% down from last week’s 27.77%

Nasdaq reached its latest new high of 7,003.89 on December 18, 2017.

 

-Russell 2000 +13.14%YTD down from last week’s +13.69%

1yr Rtn +12.64% down from last week’s +13.23%

The Russell 2000 reached its last new all-time high on December 4, 2017 of 1,559.61.

 

-Mutual funds

Although the final year-end numbers for mutual funds has yet to be published, the year-to-date average cumulative total reinvested returns for equity funds that fall under the broad U.S. Diversified Equity Funds heading were still charming.

On the day before the 2017 trading year ended, Thursday, December 28, 2017, the average return was 18.91%, according to Lipper. That’s up from the close on Thursday of the previous week of 18.57%.

Below are the best and worst average returns for the fund types that fall under the Lipper’s four broad equity fund category headings through 12/28/17:

  • U.S. Diversified Equity Funds

-best: Equity Leverage Funds, average +42.86%

-worst: Alternative Equity Market Neutral Funds, -0.06%

 

  • Sector Equity Funds

-best: Global Science/Technology Funds, +44.61%

-worst: Energy MLP Funds, -5.95%

 

  • World Equity Funds

-best: China Region Funds, +43.34%

-worst: Global Equity Income Funds, +17.30

 

  • Mixed Asset Funds

-best: Mixed-Asset Target 2055+Funds,+21.48%

-worst: Alternative Multi-Strategy Funds, +4.80%

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.

 

  • Market volatility

2017 was a rewarding one for many. It was also a year in which the markets didn’t jump around as much as one might remember.

In fact, according to a recent SeekingAlpha story by Lance Roberts, the DJIA “enjoyed less adversity in 2017 than any other year in history going back over 100 years, (beginning data in 1915).”

Here’s hoping that 2018 is as easy going a year.

Happy New Year!

 

-30-