POCKETBOOK: Week ending Feb.23, 2018

•   Some NRA related goodies now gone

I continue to be so very very proud of the students at Parkland, Florida’s Marjory Stoneman Douglas High School and their behavior following the horrific slaughtering of their fellow students on Valentine’s Day. Their actions have changed—in a positive way–how I look at young people today. And, their impact across the country is not only admirable but their determination to make changes to the power that the NRA wields within our local and state governments and in Congress, with respect to the insane gun laws practiced in our country, is Nobel Prize for Peace worthy.

What today’s students are telling their fellow Americans of all ages is that they know better: Automatic rifles don’t belong in the hands of ordinary citizens because they are weapons designed for the sole purpose of killing groups of people within seconds. And the kids’ points are well-made and correct.

These kids also know that the wheels of justice aren’t WiFi connected or on speed dial regarding the amount of time it takes to change things. To that end, I was glad to read that some of our country’s most recognized brand business names have taken steps to hit NRA members where it hurts them the most—in their pocketbooks.

Of course some will say that  there are fairness issues here, but life trumps fairness. Always has. Always will.

So hats off to the organizations, firms and institutions that have decided to end their discount programs with the NRA and its members. A few of them include: Symantec, Chubb, Enterprise, MetLife, Best Western and Wyndham Hotels.

To learn more, visit #BoycottNRA on Twitter.

 

• Market Quick Glance

Words of advice from Warren Buffett’s latest annual letter: Don’t ever borrow money to buy stocks.

Amen to that.

And to these words from Buffett quoting his partner, Charlie Munger, a triple Amen: There are three ways to go broke:”liquor, ladies and leverage”.

As for last week, the place to bet in last week’s index winner performance race was Nasdaq—-it gained the most with a y-t-d return of almost 6.3% as of Friday’s close.

With stock volatility still very much in fashion and interest rates edging upwards, some are worried about inflation while others—namely Treasury Secretary Mnunchin—is pooh-poohing it and it’s impact.

I personally think he is way wrong. But then again, what do women know? (Wink wink.) A rising interest rate environment will affect all of us whether we are investors or not.

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, Feb. 23, 2018.

–DJIA 2.02% YTD up from last week’s 2.02%  

• 1 yr Rtn 22.31%

Most recent DJIA all-time high was reached on January 26, 2018 of 26,616.71. The previous high was reached January 18, 2018 was 26,153.42.

-S&P 500 2.76% YTD up from last week’s 2.19%

• 1 yr Rtn +16.22% down from last week’s 16.40%

The S&P 500 reached its most recent all-time high on January 26, 2018 of 2,872.87. The previous high was reached on January 19, 2018 of 2810.33.

-NASDAQ +6.29 YTD up from last week’s 4.87%

• 1yr Rtn +27.74% up from last week’s 24.50%

Nasdaq latest new all-time high of 7,505.77 was reached on January 26, 2018. The previous high was reached on January 19, 2018 of 7,336.38.

-Russell 2000 +0.89%YTD up from last week’s 0.52%

• 1yr Rtn +11.08% up from last week’s +10.32%

The Russell 2000 reached an all-time high on January 24, of 1,615.52. The previous high was reached on January 16, 2018 of 1,604.02.

 

-Mutual funds

As of Monday, Feb. 26, no new Lipper Performance figure updates were available.

Here is last a repeat of week’s report: On Thursday, Feb. 15, 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 +1.53%, according to Lipper. That’s down from the -3.40% posted one week earlier.

Lipper tracks 25 of the largest mutual funds around. Within that group, here are some of the year-to-date returns of a few of those individual funds:

• The three funds with the highest returns, ytd:

-Fidelity Contrafund, up 6.58%

-American Funds Growth A, up 5.49%

-Vanguard FTSE Emerging Market ETF Fund, up 5.03%

 

• The three funds with the least returns, ytd:

-Vanguard Total Bond ll: Inv, -2.31%

-Vanguard Total Bond ll: Inv., -2.31%

-American Funds CIB:A, -0.59%

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.

 

•BlackRock

BlackRock is one heck of an investment firm and through the years has rewarded investors in its various index funds, ETFs, mutual funds and closed-end funds quite nicely.

That said, BlackRock, with an estimated $6 billion in assets that it manages, is a big time indirect gun company investor, according to the Associated Press.

Through its indirect investments,that same source reports that BlackRock is the largest stakeholder in America’s largest gun manufacturers. FactSet has reported that BlackRock has a 16.18% stake in Sturm Ruger, 11.91% in Vista, and a 10.5% stake in American Outdoor.

The trouble with fund investing is that it takes more than public outcry to change holdings in a fund, such as in mutual and index funds and ETFs. And, any changes in a fund’s investment objectives, style and holdings can’t be done willy-nilly: Changes and/or resolutions require votes and those voting privileges go out to everyone. That means you, as a shareholder, has voting rights.

Keep that in mind the next time you receive a voting proxy in the mail and decide to toss it out rather than to vote.

Funds are terrific investment vehicles. But, they are group investments. Don’t like what the fund invests in? Choose another fund. There are literally tens of thousands to choose from. Some are even Socially Responsible funds. Typically they don’t invest in sin stocks—like companies that make guns or ammunition.

Read a fund’s prospectus or check out its fund holdings before investing. You will find that info online at various sources. And don’t forget— a listing of  fund’s investments is partial and holdings aren’t updated daily but updated quarterly.

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POCKETBOOK: Week ending Feb.16, 2018

From our first US president, George Washington, comes this timely tidbit: “I hope I shall always possess firmness and virtue enough to maintain what I consider the most enviable of all titles, the character of an honest man.”

 

 

• Presidents’ Day

It all began in 1885 with the distinct purpose of celebrating the birth date of America’s first president, George Washington, whose actual birthday is February 22^nd. (He died in 1799.)

In the 133 years since, George’s b-day has morphed into a national holiday with little regard or respect for his actual day of birth. So instead of parades and speeches, his big day has been clumped in with the birthdays of three other past presidents and mashed into a three-day  holiday weekend where shopping and mini-vacations rule—not presidential praise.

Incase you may have forgotten, the reason we have a 3-day Presidents’ Day holiday, along with other 3-day celebrations, is because of the Uniform Monday Holiday Act put in place in 1971. When I was a kid, that wasn’t the case. And, there were also only three past presidents who had birthdays in February and not four as there are currently.

With that said, here are the names of the four presidents whose birthdays are in February and thus part of reason we celebrate are….drum roll please….George Washington, William Henry Harrison, Abraham Lincoln and Ronald Reagan.

If you named all four, consider yourself much much smarter than a 5^th Grader and many current high school and college grads.

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And from our first US president, George Washington, on this Presidents’ Day  comes this timely tidbit: “I hope I shall always possess firmness and virtue enough to maintain what I consider the most enviable of all titles, the character of an honest man.”

• Market Quick Glance

With stocks on sale last week, it’s not surprising that by Friday all indices followed here moved from negative into positive year-to-date returns.

The markets are closed on Monday, February 19, 2018  in honor of Presidents’ Day.

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, Feb. 16, 2018.

–DJIA +2.02% YTD up and back into + territory from last week’s -2.14%  

• 1 yr Rtn +22.31% up from last week’s 19.92%

Most recent DJIA all-time high was reached on January 26, 2018 of 26,616.71. The previous high was reached January 18, 2018 was 26,153.42.

 

-S&P 500 +2.19% YTD up and back into + territory from last week’s -2.02%

• 1 yr Rtn +16.40% up from last week’s 13.51%

The S&P 500 reached its most recent all-time high on January 26, 2018 of 2,872.87. The previous high was reached on January 19, 2018 of 2810.33.

 

-NASDAQ +4.87 YTD up and back into + territory from last week’s -0.42%

• 1yr Rtn +24.50% up a jump from last week’s 20.287%

Nasdaq latest new all-time high of 7,505.77 was reached on January 26, 2018. The previous high was reached on January 19, 2018 of 7,336.38.

 

-Russell 2000 +0.52%YTD up and back into + territory from last week’s -3.76%

• 1yr Rtn +10.32% an up jump from last week’s +7.20%

The Russell 2000 reached an all-time high on January 24, of 1,615.52. The previous high was reached on January 16, 2018 of 1,604.02.

 

-Mutual funds

From underwater to breathing a little bit of air.

On Thursday, Feb. 15, 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 +1.53%, according to Lipper. That’s down from the -3.40% posted one week earlier.

Lipper tracks 25 of the largest mutual funds around. Within that group, here are some of the year-to-date returns of a few of those individual funds:

• The three funds with the highest returns, ytd:

-Fidelity Contrafund, up 6.58%

-American Funds Growth A, up 5.49%

-Vanguard FTSE Emerging Market ETF Fund, up 5.03%

 

• The three funds with the least returns, ytd:

-Vanguard Total Bond ll: Inv, -2.31%

-Vanguard Total Bond;Ad, -2.20%

-American Funds CIB:A, -0.59%

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.

 

• Gun Sales Down

Ask me and I’ll tell you one of the best pieces of investment news I’ve heard recently is that gun sales and down! Yahoo. Yippy skippy. And it’s about time.

Guess I need to rewrite that—it’s not about time, it’s about lives.

Money.CNN.com reported that last year was the worst year for gun sales since 1999. And, that FBI background checks fell by 8% in 2017—the biggest drop on record.

Other  gun news from that same source: Gunmaker Remington announced last week it was filing for bankruptcy. And, revenues reported in 2017 by gun and ammunition manufacturers by Sturm Ruger, American Outdoor Brands, Vista Outdoors and Olin Corp. were collectively down by 13%, or $566 million, last year.

With respect to this news, I’m hoping two things: First, that that’s a trend that continues.

And second, which is much much more important, that the very verbal, well-spoken and bright high school students at the Marjory Stoneman Douglas High School are the ones whose voices will be loud enough to be heard around our country and thus make a difference in changing America’s liberal gun laws and practices.

You go kids!

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TrumpBits#22:Half-mast

Photo taken from Bill DiPaolo’s Tweet today, Feb. 16, 2018

The flag at Mar-a-Lago, Donny’s Winter White House, respectfully flies at half-mast as a symbol of respect, mourning and distress regarding the horrible mass shooting of students and teachers at the Marjory Stoneman Douglas High School in  Parkland, FL.

As long as this President, the NRA and members of Congress  continue to assess  America’s out-of-control gun control problems as related to one’s mental health, let me suggest the  following: From this day forward, anyone of any age, gender or race,  who wants to purchase a gun of any type must first be required to go through a lengthy mental health evaluation program before ever being able to purchase a gun. Period. No ifs ands or buts about it.

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POCKETBOOK: Week ending Feb.9, 2018

• Corrections and bears a good thing

As uncomfortable as it can be listening to all the talking heads sound as though the world is coming to an end with respect to the very natural movements of stock prices going down, the truth is—and always has been—stock prices go up and down. Bears and bulls, while the don’t live in the same pen, are typically natural occurrences within the investing arena. So instead of reaching for that second bottle of Jim Beam, get a paper and pencil out and do some math.

Figuring out how your portfolio(s) has weathered this current nearly 10% fall in prices has impacted your wealth is the best thing you can do under these market conditions. In fact, that’s the best thing you can do no matter which animal is roaming Wall Street, the bears or the bulls.

With that in mind, here are three market-related points to ponder:

• From Goldman Sachs comes this  posted at TheStret.com: “Most equity market corrections recover without developing into bear markets or presaging recessions. Of 16 drawdowns of 10% plus since 1976, only five occurred around a recession. S&P 500 typically declined by 15% during the 11 non-recession corrections.”
• For the second week in a row, the Merrill Lynch bull-bear indicator is flashing “sell”. This indicator has been correct in predicting 11 out of the 11 U.S. stock market corrections since 2002.
• To be called a “bear market”, broad market indexes have to fall 20% or more from their peak over a two-month period.

 

• Market Quick Glance

See-sawing from down a 1000 points to up 500 then down again. Go figure.

Every index followed here is underwater with respect to its year-to-date returns. And that’s the bad news. The good news happens when you take a longer term look. Then you will learn that three of the four indices have just fine double-digit 1-year performance returns. The exception is the Russell 2000.

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, Feb. 9, 2018.

–DJIA -2.14% YTD down and in minus territory from last week’s +3.24%  

• 1 yr Rtn +19.92% down from last week’s 28.34%

Most recent DJIA all-time high was reached on January 26, 2018 of 26,616.71. The previous high was reached January 18, 2018 was 26,153.42.

 

-S&P 500 -2.02% YTD down and in minus territory from last week’s 3.31%

• 1 yr Rtn +13.51% down from last week’s 21.10%

The S&P 500 reached its most recent all-time high on January 26, 2018 of 2,872.87. The previous high was reached on January 19, 2018 of 2810.33.

 

-NASDAQ -0.42 YTD down and in minus territory from last week’s 4.89%

• 1yr Rtn +20.28% down from last week’s 28.47%

Nasdaq latest new all-time high of 7,505.77 was reached on January 26, 2018. The previous high was reached on January 19, 2018 of 7,336.38.

 

-Russell 2000 -3.76%YTD down and in minus territory from last week’s +0.77%

• 1yr Rtn +7.20% down a pinch from last week’s +13.99%

The Russell 2000 reached an all-time high on January 24, of 1,615.52. The previous high was reached on January 16, 2018 of 1,604.02.

 

-Mutual funds

After up comes down. And then more down.

For the first time this year, the year-to-date average cumulative total reinvested returns for equity funds that fall under the broad U.S. Diversified Equity Funds heading was underwater: On Thursday, Feb. 8, 2018, it stood at -3.40%. had That’s down from the +4.44% posted one week earlier.

Of the 20 different fund types that fall under the umbrella heading of U.S. Diversified Equity Funds, only one had a positive year-to-date return. It was the Dedicated Short Bias Funds of which Lipper tracks 164. The average return for funds under its heading was +3.08%

The broad umbrella headings’ y-t-d performances though 2/8/18 were as follows:

• U.S. Diversified Equity Funds, -3.40%
• Sector Equity Funds, -4.82%
• World Equity Funds, -2.16%
• Mixed Asset Funds, -2.47%
• Domestic L-T Fixed Income Funds, 0.93%
• World Income Funds, 0.22%

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.

 

• Gold not so golden

Once thought as a safe haven for whatever crapola is going on with stock prices, investing in gold was thought of as a no-brainer. This precious metal has always been pitched as an asset investors ought to commit about 5% of their portfolio to.

The thinking for that suggestion has been— when stock prices fall the price of gold would increase. And the proof was in the past-performance pudding.

From CNBC.com comes this: “During the 2008 crisis when the S&P 500 Index lost 57 percent in market capitalization, gold rose 24 percent. Earlier in the bear market from 2000 to 2002, theS&P lost 49% while gold added nearly 13 percent.”

The performance numbers in that paragraph are good to remember.

Nonetheless, gold prices haven’t behaved as expected and have fallen by about 2% so far this month, according to that same source.
 

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POCKETBOOK: Week ending Feb.2, 2018

•2.5%—ya buy 2% milk, don’t ya?

Readers of this site know that I’ve been posting “be careful”  kinds of blogs for more than a year now. Well, maybe forever. That might be making me a glass half-empty kind of gal but I see it as being realistic more than anything else.

Why? Because if anyone tells you that there is no risk to investing in equities they’d be lying and you’d be a fool to believe them.

Investing in stocks has always been risky with no guarantees of making a profit no matter what any mountain charts look like.

A mountain chart, in case you’ve forgotten, is a chart that looks at the performance of  say a stock or  popular index such as the DJIA  over an extended period of time—like since 1920, or 1990 or 2000 or 2008 until now. There’s no standard begin time when designing a mountain chart but the end is typically now.

The purpose of a mountain chart is to show that yes indeedy stock prices have increased over the long haul. And, yes indeedy trends both up and down can be seen on it. And yes indeedy markets do recover.

That said, the 2.5% fall of the DJIA on Friday, Feb 2, 2018 is no big deal if it’s a onsey. If that fall is the beginning of a trend, unfortunately, that’s something no one knows ahead of time.

So, who knows what this week will bring? But, if Merrill Lynch’s bull-bear indicator —which has been correct in predicting 11 out of the 11 U.S. stock market corrections since 2002—is correct again, it’s now sending out a “sell” signal.

We shall see.

 

• Market Quick Glance

All four of the indices followed here saw their year-to-date returns suffer seriously—like nearly halved– when the markets closed on Friday. The worst hit was to the Russell 2000—it lost nearly all the positive ground  made this year.

The DJIA dropped nearly 666 points on Friday, Feb. 2, 2018—a rare occasion and the sixth-worse decline in the Dow’s nearly 122 year history.

A closer historical look reveals that a decline of over 500 points for the DJIA in one day has happened 17 times since 1993, according to Kensho, a hedge fund analytics tool CNBC referenced in a story.

Using that same tool, the Dow rose 1.5% on average, the day after that kind of fall with a 65% chance of recovery.

If you’re looking for some investment advice here, I’d suggest remembering that, as with all things in life, everything changes. And profits are best taken for real and not merely seen on paper.

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, Feb. 2, 2018.

 

–DJIA +3.24% YTD down seriously from last week’s 7.28%  

• 1 yr Rtn +28.34% down from last week’s 32.42%

No new high for the DJIA. The last one was reached on January 26, 2018 of 26,616.71. The previous high was reached January 18, 2018 was 26,153.42.

 

-S&P 500 +3.31% YTD down seriously from last week’s 7.45%

• 1 yr Rtn +21.10% down from last week’s 25.09%

No new high for the S&P 500 Index. The last one was reached on January 26, 2018 of 2,872.87. The previous high was reached on January 19, 2018 of 2810.33.

 

-NASDAQ +4.89 YTD down seriously from last week’s 8.73%

• 1yr Rtn +28.47% down from last week’s 32.72%

Nasdaq latest new all-time high of 7,505.77 was reached on January 26, 2018. The previous high was reached on January 19, 2018 of 7,336.38.

 

-Russell 2000 0.77%YTD down bad from last week’s 4.72%

• 1yr Rtn +13.99% down a pinch from last week’s +16.90%

The Russell 2000 reached its latest all-time high on January 24, of 1,615.52. The previous high was reached on January 16, 2018 of 1,604.02.

 

-Mutual funds

After up comes down.

As you would expect, on Thursday, Feb. 1, 2018, the year-to-date average cumulative total reinvested returns for equity funds that fall under the broad U.S. Diversified Equity Funds heading stood at +4.44%. That’s down from the +5.32 % posted one week earlier.

To show how quickly things can change, below are the three fund types that have enjoyed positive y-t-d return so far this year under the U.S. Diversified Equity Funds broad heading. Here is how their y-t-date average returns have changed from one week to the next to the next to the next:

-Equity Leverage Funds: +9.43% (2/1/18): the week before it, +12.08%: and the week prior, +8.37 %.

-Large-Cap Growth Funds: +7.64%(2/1/18); the week before, +8.00%; and the week prior, +6.06%.

-Multi-Cap Growth Funds:+ 6.96% (2/1/18); the week before, +7.47%; and the week prior, +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.

• REPEAT: Consider a stop-loss

A few weeks ago I wrote about how a falling dollar isn’t typically a great economic indicator, nor is the fact that credit card balances are increasing and savings rates declining. Throw in a rising interest rate environment and all can point to a not-so-hot performing stock market.

Last week I wrote about using stop-loss orders—a subject  worth repeating. So here goes: “When it comes to the ups and downs of investing in stocks, don’t forget that one way to protect yourself when the market turns south is to place a stop-loss on the stocks you want to preserve gains in.

From investopedia.com:”A stop–loss order is an order placed with a broker to sell a security when it reaches a certain price. Stop loss orders are designed to limit an investor’s loss on a position in a security.””

And don’t forget, locking in the gains made from your stock investments is what investing is all about.

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