POCKETBOOK Week Ending Feb.15, 2019


 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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