POCKETBOOK Week Ending Dec. 28, 2018

 

• The Best Investment Ever

Now that 2019 is hours away and every financial fortune-teller has begun sharing their maybe, could be and hopeful projections about what’s going to happen on Wall Street in the New Year, there really is only one investment that matters: You.

You are the one who is typically in control of what securities to purchase or liquidate and when to do so. You are the one who decides how much effort to put into making your investment selections. And you are the one who doles out the money to spend on the investments of your choosing.

While it’s all up to you to decide whether or not to invest, the one thing you have no control over is how the stocks, bonds or ETFs will perform over the course of a year. Or, during the investing lifetime you’ve given them.

Given that the power of you stops the minute you plop down your first buck in hopes of reaping some financial reward from doing so, and, that Wall Street comes with no promise of future returns, the only investment that can return any kind of cherished return is an investment in yourself.

So Happy New Year to You! And may 2019 be a rewarding year for you and yours.

 

• Market Quick Glance

When down is up.

Goofy how it all works. Two weeks ago the year-to-date returns on the indices followed here were in serious minus territory. Then, at the close of business on Friday those minus returns weren’t eliminated but they were improved.

What the last day of trading in 2018 will bring us is anybody’s guess as is the performance of all things on Wall Street going forward in 2019.

If there is any sound guidance to give at this point in time it is simply to know where your money is invested and why it’s been placed there. After that, it’s a come- what-may life for all of us with fingers crossed our picks turn out to be rewarding.

Below are the weekly and 1-year index performance results for the four major indices—DJIA, S&P 500 and NASDAQ — including the dates each reached new highs. Data is according to CNBC.com and based on prices at the close of business on Friday, Dec. 28, 2018.

–DJIA -6.70% YTD up from the previous week’s -9.20%.

• 1 yr. Rtn -7.15% also up from the previous week -9.43%

Most recent DJIA a new ALL-TIME CLOSING HIGH was reached on Oct.3, 2018 of 26,951.81. The previous high was reached on Sept. 21, 2018 of 26,796.16.

 

-S&P 500 -7.03% YTD up from last week’s -9.61%

• 1 yr. Rtn -7.51% also up from last week’s -9.98%

The S&P 500 reached a BRAND NEW CLOSING ALL-TIME HIGH on Sept. 21, 2018 of 2,940.91. The previous closing high was reached on August 29, 2018 of 2,916.50.

 

-NASDAQ -4.62% YTD hey up considerably from last week’s -8.26%

• 1yr Rtn -5.26% also up from last week’s -9.08%

Nasdaq reached a BRAND NEW 52-week CLOSING HIGH on August 30, 2018 of 8,1333.30. The previous high was reached on August 24, 2018 of 7,949.71.

 

-Mutual funds

Repeat from last week:

P U. There was only one U.S. Diversified Equity Fund heading that ended last week with a positive average return. It was Dedicated Short Bias Funds with an average total return of 11.15%. That category of funds numbers 162 out of the 8,214 funds under the U.S. Diversified heading.

In other words, there is nothing pretty about the average returns on equity funds last week. Then again, how could their be with the stock prices fall, fall, falling.

The average year-to-date total return for funds that fall under the heading of U.S. Diversified Equity Funds stood at -9.18% at the close of business on Thursday, December 20, 2018, according to Lipper. That’s down a huge heap from the previous week’s figure of -3.12% %.

For a broader look, the average Sector Equity Funds’ return was -9.98%; World Equity Funds, -15.34%; Mixed Asset Funds, -6.95%; Domestic L-T Fixed Inc Funds, -1.15%; and World Income Funds, -4.09%.

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.

 

• Raises

Calling all Floridian hourly workers: You’re getting a raise. A puny raise but a raise nonetheless.

While the minimum wage is heading up in 20 states around the country beginning in the New Year, in Florida the 21 cent an hour increase isn’t likely to get you that Mercedes but it will make a difference.

Florida’s current minimum wage through December 31, 2018 is $8.25 an hour. The new 2019 minimum wage in the Sunshine State will be $8.46.

Doing the math that translates to an additional $8.40 a week for those working a 40-hour week and $436.80 a year.

Other states with puny increases in their minimum wages include 21 cents in Minnesota, from $9.65 to $9,86 an hour; Montana, 20 cents, from $8.30 to $8.50 an hour; and Alaska, up 5 pennies, from $9.84 to $9.89.

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TrumpBits#31: A High Priced New Year’s Eve

I’m beginning to wonder if The Donald needs money. The Town of Palm Beach has approved some new docks for him to have installed at Mar-a-Lago so guests may arrive by water, that’s gonna be pricey unless someone else, like Mexico, is going to pay for it. Then again, he is getting a tax refund because it appears he overpaid some property taxes. But it’s the cost of attending his annual New Year’s Eve party that has both skyrocketed and has me wondering.

Just a few years ago the price for ringing in the New Year at Mar-a-Lago was a mere 50 bucks for members and nonmember guests, according to Tribute New Services. Whoa. That’s cheap and so very very yesterday and pre-president.

This year, guests will have to fork over $1000 per person, plus a 7% tax and a 20% gratuity, to party at MaL. That’s $250 more than last year’s fee of $750 person, and up from the $575 per head price from the year before.

Given that a number of charities pulled out of having their fund-raising balls at Mar-a-Lago earlier this year, those income losses have to have cost him. Doubling the initiation fees for Club membership from $100,000 to $200,000, plus the $14,000 in annual fees, might have helped, but something tells me that Trump’s Club coffers aren’t as flush as he’d like the world to think. Then again, nothing new about that.

Nontheless, I’m figuring that all Trumpsters and Mar-a-Lago members and their guests are looking forward to a raucous time at the Club this year no matter what the party fee is. Too bad that fee doesn’t come with the guarantee that  Mr. President and his wife will be there.

 

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POCKETBOOK Week Ending Dec. 21, 2018

• Your Christmas Lump of Coal

It takes more than tax breaks for corporations and the wealthy to make a market shine: As, if not more important, is a country’s confidence in its President’s actions along with that of his appointed cabinet, the economy and what’s happening around the world. So….so much for this year’s Santa Claus rally.

You might want to take a belt of hooch before reviewing the performance of last week’s markets. Here, from CNBC.com, is a bit of it:

-The Dow Jones Industrial Average lost 6.8%—the worse percentage drop since October 2008.

-Nasdaq lost 8.3% and is now 22% below the high it reached in August.

-The S&P 500 lost 7% last week.

-Performances of both the DJIA and the S&P are on track for their worst December performance since the Great Depression of 1931.

If nothing else, the gift that 2018 has reminded all investors of is that just as a stock’s price can go up, so can it fall. And that’s okay. After all, investing never came with any promises. Only hopes.

 

• Market Quick Glance

2018 has turned out to be one ugly year for anyone who bet that stock indices would delightfully reward investors with positive returns this year. It hasn’t.

Worse yet, more than one talking head predicts that at least the first half of 2019 to be a rough one for equities.

Stephen Suttmeier, chief equity technical strategists at Bank of America-Merrill Lynch relies on charts for his analysis and says, “We do think the equity markets are set up to continue this cyclical bear market or bear market, just call it what it is—and correct further, a further retracement.”

Below are the weekly and 1-year index performance results for the four major indices—DJIA, S&P 500 and NASDAQ — including the dates each reached new highs. Data is according to CNBC.com and based on prices at the close of business on Friday, Dec. 21, 2018.

–DJIA -9.20% YTD WAY down from the previous week’s -2.50%.

• 1 yr. Rtn -9.43% also way down from the previous week -1.67%

Most recent DJIA a new ALL-TIME CLOSING HIGH was reached on Oct.3, 2018 of 26,951.81. The previous high was reached on Sept. 21, 2018 of 26,796.16.

 

-S&P 500 -9.61% YTD WAY down from last week’s -2.76%

• 1 yr. Rtn -9.98% also way down from last week’s -1.96%

The S&P 500 reached a BRAND NEW CLOSING ALL-TIME HIGH on Sept. 21, 2018 of 2,940.91. The previous closing high was reached on August 29, 2018 of 2,916.50.

 

-NASDAQ -8.26% YTD WAY down from last week’s 0.11%

• 1yr Rtn -9.08% also way down from last week’s 0.79%

Nasdaq reached a BRAND NEW 52-week CLOSING HIGH on August 30, 2018 of 8,1333.30. The previous high was reached on August 24, 2018 of 7,949.71.

 

 

-Mutual funds

P U. There was only one U.S. Diversified Equity Fund heading that ended last week with a positive average return. It was Dedicated Short Bias Funds with an average total return of 11.15%. That category of funds numbers 162 out of the 8,214 funds under the U.S. Diversified heading.

In other words, there is nothing pretty about the average returns on equity funds last week. Then again, how could their be with the stock prices fall, fall, falling.

The average year-to-date total return for funds that fall under the heading of U.S. Diversified Equity Funds stood at -9.18% at the close of business on Thursday, December 20, 2018, according to Lipper. That’s down a huge heap from the previous week’s figure of -3.12% %.

For a broader look, the average Sector Equity Funds’ return was -9.98%; World Equity Funds, -15.34%; Mixed Asset Funds, -6.95%; Domestic L-T Fixed Inc Funds, -1.15%; and World Income Funds, -4.09%.

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.

 

• Then Again: OPPORTUNITY
  

If you liked Apple at $233.47, its 52-week high, you gotta love it at $150.73, Friday’s closing price. Right?

Well, may yes, maybe no.

However you assess the worth and value of investing in any stock—whether it’s Apple or something else– depends upon three things—and always three things:

1.How you think.

2.Your reason(s) for investing in it.

3.The price at which you intend to sell it.

 

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It’s time for Santa and Dian

Time for you and your little ones to be Santa inspired.

This interview was conducted decades ago, in the early 1980s, so please don’t call the number. But some things, like Santa, magically stand the test of time. Happy almost Christmas. Enjoy

 

POCKETBOOK Week Ending Dec. 15, 2018

 

Folks  may be spending plenty this holiday season but according to a CNBC All-American Economic Survey our optimism about our economic  future has fallen.

 

• It’s a Global World of Worry

As money continues to be the value that rules the world, it ought to come as no surprise that when our equity markets are in the tank, so are many of those around the globe. Or visa versa.

“The market tensions we saw during this quarter were not an isolated event,” said Claudio Borio, head of the monetary and economic department at the Bank of International Settlements (BIS). BIS is an umbrella group for the world’s central banks.

Combine the fear of our Fed increasing interest rates, our soaring debt, trade tensions at home and abroad, political worries at home and abroad and it’s no wonder that stocks aren’t performing so hap-hap-happly this holiday season.

 

• Market Quick Glance

If the total value of your portfolio is positive so far this year, stand up and cheer. Then call your financial advisor, broker or whomever it is that’s managing your money and say thanks.

Below are the weekly and 1-year index performance results for the four major indices—DJIA, S&P 500 and NASDAQ — including the dates each reached new highs. Data is according to CNBC.com and based on prices at the close of business on Friday, Dec. 14, 2018.

–DJIA -2.50% YTD down more from the previous week’s -1.34%.

• 1 yr. Rtn -1.67% way down from the previous week 0.73%

Most recent DJIA a new ALL-TIME CLOSING HIGH was reached on Oct.3, 2018 of 26,951.81. The previous high was reached on Sept. 21, 2018 of 26,796.16.

 

-S&P 500 -2.76% YTD down more from last week’s -1.52%

• 1 yr. Rtn -1.96%

The S&P 500 reached a BRAND NEW CLOSING ALL-TIME HIGH on Sept. 21, 2018 of 2,940.91. The previous closing high was reached on August 29, 2018 of 2,916.50.

 

-NASDAQ 0.11% YTD down from last week’s 0.95%

• 1yr Rtn 0.79% way down from last week’s 2.30%

Nasdaq reached a BRAND NEW 52-week CLOSING HIGH on August 30, 2018 of 8,1333.30. The previous high was reached on August 24, 2018 of 7,949.71.

 

 

-Mutual funds

And things keep getting ugly.

The average year-to-date total return for funds that fall under the heading of U.S. Diversified Equity Funds stood at -3.12% at the close of business on Thursday, December 13, 2018, according to Lipper. That’s down considerably from the previous week’s figure of -0.94%.

Of the 25 largest equity funds that Lipper tracks, total returns aren’t much sweeter. Even three of Vanguard’s funds have total returns deep in minus territory.

They include: Vanguard Tot I S: Investors, -12.15%; Vanguard Tot I S: Ins,-12.08; and Vanguard To IS :Adm, -12-13%.

The top two performing funds, y-t-d, among that list of 25 were the Fidelity Contrafund, 2.85% and American Funds Growth: A, 2.08%.

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.

 

• Salt in a Wound

So you say you missed a chance to invest in Elon Musk’s Tesla?

Oh well, so did I.

But if either of us had plopped down  $1000 in TSLA eight years ago, in 2010, and had neither of us sold any portion of that investment, on  December 12, 2018, that 1000 bucks would  have turned into $21,000, according to CNBC.

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POCKETBOOK Week Ending Dec. 8, 2018

• Looking Down Looking Back

There’s no ignoring the performance of equities these days and that’s a good thing. A correcting or bear or underwater market reminds every single investor—and non-investor—that: “Yes, Virginia, stock prices don’t always climb upward as they have for the past almost 10 years.”

So as you review your portfolio, consider that there are always investment opportunities no matter what’s happening on Wall Street. Bunches of investors have made their fortunes investing when equity news hasn’t been so hot.

Furthermore, taking a longer look back on your investment returns may show you things you’ve forgotten.

For instance, The Bespoke Investment Group publishes its “Bespoke 50” list of growth stocks in the Russell 3,000.

Bespoke began publishing the list in 2012 and since that time returns have beaten the S&P 500 by 80.5%.

Today, that list is up 176.8% since inception while the S&P 500’s gain (through 12/6/18) was 96.2%.

So Virginia, things might not be as bad as they appear.

 

• Market Quick Glance

Ed Clissold, a bear market official at Ned Davis Research, says that the bear market is officially here. At the same time, he’s optimistic about next year and expects to see a rally during the second half of 2019.

We shall see.

In case you’ve forgotten, it’s been nearly 10 years since the bear claws have shown up on Wall Street. And, a bear market is defined as a fall of 20% from an index’s recent high.

Below are the weekly and 1-year index performance results for the four major indices—DJIA, S&P 500 and NASDAQ — including the dates each reached new highs. Data is according to CNBC.com and based on prices at the close of business on Friday, Dec. 7, 2018.

–DJIA -1.34% YTD big move down from the previous week’s 3.31%.

• 1 yr. Rtn 0.73% way down from the previous week 5.22%

Most recent DJIA a new ALL-TIME CLOSING HIGH was reached on Oct.3, 2018 of 26,951.81. The previous high was reached on Sept. 21, 2018 of 26,796.16.

 

-S&P 500 -1.52% YTD a big move down from last week’s 3.24%

• 1 yr. Rtn -0.15% way down from last week’s 4.25%

The S&P 500 reached a BRAND NEW CLOSING ALL-TIME HIGH on Sept. 21, 2018 of 2,940.91. The previous closing high was reached on August 29, 2018 of 2,916.50.

 

-NASDAQ 0.95% YTD big move down from last week’s 6.19%

• 1yr Rtn 2.30% way down from last week’s 6.64%

Nasdaq reached a BRAND NEW 52-week CLOSING HIGH on August 30, 2018 of 8,1333.30. The previous high was reached on August 24, 2018 of 7,949.71.

 

-Mutual Funds

The average year-to-date total return for funds that fall under the heading of U.S. Diversified Equity Funds stood at -0.94% at the close of business on Thursday, December 6, 2018, according to Lipper. That’s down from the previous week’s figure of 0.68%.

Fund types with the worst y-t-d returns include  precious and basic metals funds.

For instance: Precious Metals Equity Funds, -21.65% for the year, on average; Basic Metals Funds, -17.92%; and Global Natural Resources Funds, -14.97%

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.

 

• Got Gas?

Diversifying your investment portfolio has always made sense. Case in point: Commodities.

According to Bespoke Investment Group, while silver, copper, coffee, platinum, oil, gold and corn are all down between -2.9% (corn) and 15.7% (silver), all commodity prices aren’t in the tank.

2018 winners, so far, include orange juice, up 5.4%, wheat, up 5.7% and natural gas, up 47.2%.

Yahoo for gas!

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POCKETBOOK Week Ending Dec. 1, 2018

 

Based upon this chart, waiting for a Santa Claus rally this December could mean waiting till next year. (Source: CNBC.)

 

• Trump’s  Hands

If you don’t think President Trump has a hand in how our markets are performing, better think again. Two simple examples: Not only has he put pressure on Fed Chairman Powell not to increase interest rates in spite of the fact that data shows suggesting a move up would be appropriate. And he  hasalso delayed his big time increases re raising China tariffs 25% until after the New Year, that is, for 90 days.

Each move could make Wall Street investors hap-hap-happier this holiday season. Then again, maybe not: While wages may have increased a bit for some,  credit card debt is  also on the rise. And, while the cost of a gallon of regular gas is cheap, groceries aren’t.

Additionally, as  far as  Santa ho-ho-hoing his way into town, climate change could muck up that sleigh ride.

Then there’s  Trump’s great big corporate tax cut —other than impacting mega corporations, it’s going to come back and bite many  of us one way or another.

To make that point, consider the following from the Treasury Department’s budget report  from a PBS New Hour report dated Oct.19, 2018:

-The 2018 budget deficit: $779 billion

-The budget deficit compared to 2017: + $113 billion

-Government revenue compared to 2017: +$14 billion

-Government spending compared to 2017: +$127 billion

I remember when one of the primary tenets of the GOP was to limit government spending and be fiscally responsible.

What ever happened to that?

 

• Market Quick Glance

Up.

Below are the weekly and 1-year index performance results for the four major indices—DJIA, S&P 500, NASDAQ and the Russell 2000— including the dates each reached new highs. Data is according to CNBC.com and based on prices at the close of business on Friday, Nov. 30, 2018.

–DJIA 3.31% YTD a big move up from the previous week’s return of -1.75%.

• 1 yr Rtn 5.22% up from the previous week 3.23%

Most recent DJIA a new ALL-TIME CLOSING HIGH was reached on Oct.3, 2018 of 26,951.81. The previous high was reached on Sept. 21, 2018 of 26,796.16.

 

-S&P 500 3.24% YTD a big move up from last week’s -1.54%

• 1 yr. Rtn 4.25% way up from last week’s 1.37%

The S&P 500 reached a BRAND NEW CLOSING ALL-TIME HIGH on Sept. 21, 2018 of 2,940.91. The previous closing high was reached on August 29, 2018 of 2,916.50.

 

-NASDAQ 6.19% YTD jumping way up from last week’s 0.52%

• 1yr Rtn 6.64% also a big jump up from last week’s 1.04%

Nasdaq reached a BRAND NEW 52-week CLOSING HIGH on August 30, 2018 of 8,1333.30. The previous high was reached on August 24, 2018 of 7,949.71.

 

-Russell 2000 -0.15% YTD up but still down from last week’s -3.05%

• 1yr Rtn -0.70% still in minus-land from last week’s -1.85%

The Russell 2000 reached a BRAND NEW 52-week ALL-TIME HIGH on August 31, 2018 of 1,742.09. The previous high was reached on August 24, 2018 of 1,726.97.

 

-Mutual funds

Two weeks ago, (11/15/18), the average total return for funds that fall under the U.S. Diversified Equity Funds heading was 0.68%, according to Lipper. On Thursday, Nov. 29, 2018, that average had increase a bit to 0.99%.

That figure happens to be way down from the 3.33% average return posted  three weeks ago on Nov. 18, 2018.

In an effort to put a positive spin on things—as in keeping fund investors thinking longer term rather that short term—2 years ago, (11/3/16-11/29/18) the average fund under this heading had a total return of 9.50%.

Then look back 3 and 5 years and the total return figure changes form 8.39% and 7.23% respectively.

East to see that clearly, things change.

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.

 

• A New Year: A New Franchise Career

With a New Year right around the corner comes new opportunity for those with an eye to change and who want to be their own boss. One way to do that is by entering into a franchise agreement with an already established franchise brand.

I ran across this piece by Marco Carbaio, published in TheBalance.com, titled, “What’s the Best Franchise to Own?”

Here’s a quick directly-from-the-horses-mouth  look at a few of the picks from that piece that focused on the best 2017 franchises to own and selected by the pros at The Balance Small Business:

• 7-Eleven Inc

This well-known brand can trace its origin back to 1927. In 2017, it had over 60,000 franchised location stores both within and outside the US. As a franchisee, the initial investment capital is as low as $37,200 and the highest is $1,635,200. The net worth requirement is between $100,000 and $250,000 while the liquid cash requirement  needed is between $50,000 and $150,000.

• McDonald’s

McDonald’s has been franchised for the last 62 years and has over 30,000 locations. To get into this game prospective franchisees takes an initial franchising fee of $45,000 while the initial total investment capital is between $1,008,000 and $2,214,080. Also required is liquid cash of $500,000. Every year franchisees pay a 4 percent annual royalty fees on all the sales made.

• The UPS Store

Founded in 1980. The UPS Store now has about 6,000 franchises.. The initial investment required to franchise is between $177,955 and $402,995. Your net worth requirement is $150,000 while the liquid cash requirement is $60,000. The initial franchising fee is $29,950 and the ongoing royalty fee is 5 percent.

• Visiting Angels

The franchise fee for this home care franchise begins at $43,750. The royalty fees are 3.5 percent of the total revenues. If you make more money in terms of revenues, you get a discount and will then  pay 2.5 percent of the total revenues. You will also be involved in webinar teleconferences, annual conferences and trainings, being advertised online, TV ad over the radio and also receive home care leads on a monthly basis

The link for the piece is this: https://www.thebalancesmb.com/what-is-the-best-franchise-to-own-4150743

 

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