Monthly Archives: February 2019

POCKETBOOK Week Ending Feb.15, 2019

 

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 Happy Presidents Day to you  from four of our most outstanding past presidents.

 

 

  • Got Debt? No Problem?

Way back in the last few decades of the last century when I first began selling municipal bonds, one of the roads to financial success for a new salesperson—-according to management—was to get yourself into debt. Big debt. You know, the kind of debt that gets you to buy that new BMW 5 series you’ve always wanted when what you really could afford was a used Toyota. The reasoning behind management’s thinking was that responsible salespeople with debt will work hard to pay off—or down—their debts. And while that really didn’t follow the Minnesota money logic I was raised with, I was in Florida after all and things, as we all have come to learn, can be very different on Florida’s Wall Street.

I tell you this because that kind of money management logic still exists today. And, still plays a big part in how many people manage their own personal finances as well as how our government manages its debts.

According to a recent Wall Street Journal story, our US annual budget deficit will  top $1 trillion in three years, by 2022. The key to managing that debt and seeing that its gets tended to is simple: America’s growth rate has to keep growing and wind up greater than what the cost of what carrying that debt is.

It’s a keep working kind of thing.

Trouble is, America’s growth rate, its GDP, changes year to year. Much like how one’s salary or annual income can.

Knowing that and the risks inherent in any changing environment, life has taught me that it’s best to live below one’s means than it is to hope for some future income that may or may not materialize.

 

  • Market Quick Glance

Big time moves upward for year-to-date returns for the indices below. Big time slides backwards for 1-year returns.

Below are the weekly and 1-year index performance results for the three 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, Feb.15, 2019.

DJIA 10.96% YTD up plenty from the previous week’s 7.63%.

  • 1 yr. Rtn 2.71% down bigly 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   10.72 % YTD up lots from last week’s 8.02%

  • 1 yr. Rtn 1.63% down plenty from last week’s 4.92%

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 12.62% YTD up plenty from last week’s 9.99%

  • 1yr Rtn 2.98% way down from last week’s 7.69%

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 January:

Looking up.

At the close of business on Thursday, Jan. 10, 2019, the total return for the average stock fund under the broad U.S. Diversified Equity Fund heading was 4.70%, according to Lipper.

Looking at the fund types with the highest year-to-date gains under the various headings shows the following:

-U.S. Diversified Equity Funds average, 4.70%; highest Equity Leveraged Funds, 11.08%; lowest, Dedicated Short Bias Funds, -8.88%

-Sector Equity Funds average 4.88%; highest Energy MLP Funds, 11.74%; lowest Alternative Managed Funds, -2.20%

-World Equity Funds average 4.07%; highest Latin American Funds, 9.01%; lowest India Region Funds, -1.23%.

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.

 

  • Recession Ahead?

A recent Bloomberg.com story, noted that S&P 500 profits are expected to fall in Q1.

From that piece, pub date 2/16/19 by Titiana Darie, titled “Wall Street Is Split on Profits: Does an “Earnings Recession” Loom?” come these words worth considering:

“Based on the average of analysts estimates, U.S. firms are on the cusp of suffering two consecutive quarters of profit declines, the common definition of a recession. Earnings will contract in the first quarter, and while a small increase is currently projected for the following period, that is likely to evaporate. Analysts have been lowering forecasts since the start of the year as companies continue to slash outlooks, citing everything from a stronger dollar to weaker demand in China and rising costs.”

 

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POCKETBOOK Week Ending Feb.10, 2019

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•Tax Cuts.

If you’re expecting a big fat refund check from the IRS this year, don’t hold your breath. Turns out Trump’s big fat tax cuts haven’t turned out to reward  tax payers as generaosly as they have the wealthy and large corporations. But that comes as no surprise if you’ve been a follower of this site.

Basically, tax cuts work best when taxes are high—which makes sense. And the highest max tax rate has been high for corporations, sort of:That said, corporations have always had more ways to reduce their tax bills and reduce the tax rate paid thanks to a number of write-off’s companies can take vs. the puny few available to individuals.

Additionally, all the poppycock the Trump administration spewed about how his 2017 Tax Cut and Jobs Act would put more money into people’s pockets, bring about more jobs and pump up salaries along the way, really hasn’t happened.

Sadly, cutting the corporate tax rates wound up rewarding those very same corporations more than they have individuals. One of the results has been smaller refund checks for individuals as the average tax refund check is down 8 percent this year over last translating into about $170 less, according to the IRS.

To put your best tax foot forward, do yourself a favor and take another look at the number of dependents claimed on your withholding. Changing it could mean less in your take home paychecks but maybe possibly could be more in the size of next year’s refund check.

 

  • Market Quick Glance

Positive strides upward on year-to-date returns for the three indices below and big jumps up on 1-year returns.

Below are the weekly and 1-year index performance results for the three 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, Feb.8, 2019.

DJIA 7.63% YTD up a hair from previous week’s 7.44%.

  • 1 yr. Rtn 5.22% huge jump from the previous week -4.29%

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   8.02 % YTD up from last week’s 7.97%

  • 1 yr. Rtn 4.92% hugely improved from last week’s -4.09%

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 9.99% YTD up a bit from last week’s 9.47%

  • 1yr Rtn 7.69% huge jump up from last week’s -1.65%

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 early January:

Looking up.

At the close of business on Thursday, Jan. 10, 2019, the total return for the average stock fund under the broad U.S. Diversified Equity Fund heading was 4.70%, according to Lipper.

Looking at the fund types with the highest year-to-date gains under the various headings shows the following:

-U.S. Diversified Equity Funds average, 4.70%; highest Equity Leveraged Funds, 11.08%; lowest, Dedicated Short Bias Funds, -8.88%

-Sector Equity Funds average 4.88%; highest Energy MLP Funds, 11.74%; lowest Alternative Managed Funds, -2.20%

-World Equity Funds average 4.07%; highest Latin American Funds, 9.01%; lowest India Region Funds, -1.23%.

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.

 

  • ETFs

Exchange-traded funds (ETFs) have come a long way over the past 20-some years. Not only have the number of them swelled right along with assets invested in them, advisors are using and suggesting them big time.

Cerulli Associates reports that 14.1% of financial advisors’ clients were allocated to ETFs at the end of 2018 compared with 5.4% in 2009.

With money pouring out of mutual funds the growing trend for ETFs shows no sign of stopping this year.

But buyer beware, ETFs do have their pluses but they also aren’t the appropriate vehicle for everyone. Make sure to do your homework and research what’s in an ETFs portfolio before investing.

 

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POCKETBOOK Week Ending Feb.1, 2019

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  • Golden appeal

Turns out, central banks bought more gold in 2018 than any years since 1967, according to the World Gold Council. That’s good news for anyone loving this precious metal—just not always profitable news.

Surprisingly, that increase in what gold was being used for wasn’t in jewelry. Nope, counties such as China, Poland, Russia, Turkey and Kazakhstan have been adding it to their reserves. Jewelry demand, on the other hand, was pretty much unchanged.

We’ve been told that gold is generally thought of as a good bet during times of political or economic unrest and turbulence. And, it’s always been thought of as a kind of balancer, or hedge, to one’s existing equity portfolios during volatile markets even though making money from it hasn’t been a slam dunk.

That said, if you’ve an interest in the glittery stuff, here’s a brief look at how its per ounce price has performed over the years according to data from KITCO.com;

-10 year high 1900.30; low 868.70

-5 year high 1382.; low 1050.6

-1 year high 1353.30; low 1173,70

-Today, Monday, Feb.4, 2019 at 2:52 pm—1313.70

“Economic uncertainty, slowdown, (and the) U.S.-China trade conflict supported investment flows,” said the World Gold Council’s head of market intelligence, Alistair Hewitt who added. “This dynamic is likely to run through 2019.”

 

  • Market Quick Glance

Nice jump ups last week on the year-to-date returns for the three indices followed here. But can that trend, if it is a trend, continue? Time will tell.

Below are the weekly and 1-year index performance results for the three 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, Feb.1, 2019.

DJIA 7.44% YTD up from the previous week’s 6.04%.

  • 1 yr. Rtn -4.29% improved from the previous week -6.2%

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   7.97 % YTD down from last week’s 6.30%

  • 1 yr. Rtn -4.09% improved from last week’s -6.15%

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 9.47% YTD up from last week’s 7.98%

  • 1yr Rtn -1.65% improved from last week’s -3.32%

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 early January:

Looking up.

At the close of business on Thursday, Jan. 10, 2019, the total return for the average stock fund under the broad U.S. Diversified Equity Fund heading was 4.70%, according to Lipper.

Looking at the fund types with the highest year-to-date gains under the various headings shows the following:

-U.S. Diversified Equity Funds average, 4.70%; highest Equity Leveraged Funds, 11.08%; lowest, Dedicated Short Bias Funds, -8.88%

-Sector Equity Funds average 4.88%; highest Energy MLP Funds, 11.74%; lowest Alternative Managed Funds, -2.20%

-World Equity Funds average 4.07%; highest Latin American Funds, 9.01%; lowest India Region Funds, -1.23%.

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.

 

  • Christian Investing

I remember learning that it was easier for a camel to get through the eye of a needle than it was for a rich man to get into heaven. I’m going to guess that the folks who run the various portfolios of the Timothy Plan might see that differently.

The Timothy Plan group of funds was created 25 years ago to meet the needs of Christian investors who didn’t want their money invested in companies that support things such as pornography, abortion, wars, any anti-family causes or simply companies whose products run contrary to the teachings of Scripture.

To date that’s paid off for them as the family now has over $1 billion under management.

From their recent press release: “The impact of our investments affects more than the return column on our account statements, it enables companies of high moral character to establish a greater presence in our community at large—Kingdom Impact Investing.”

Believers in that style of investing can learn more about their funds, fund performances, etc.  at TimothyPlan.com.

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