POCKETBOOK: Week ending April 14, 2018

• •Stocks and Bonds

If I remember correctly, near the end of last year many many many talking heads were telling everyone that the best performing stocks in 2018 were going to be those of companies located outside of the U.S. and around the world.

As many times is the case, that advice hasn’t exactly panned out so far this year. What we’ve seen instead is more worries than rewards. Why? Because of rising interest rates. One reason, the 10-year U.S. Treasury note has come as close as possible to a dreaded 3 percent yield. At this writing it stands at 2.99 percent.

Should that 3 percent return come to bear, it would be the highest level on our 10-year Treasury in four years– since January 2014—and the widest spread between it and German bonds in 29 years.

This worries talking heads as rising interest rates do impact stock prices at home and abroad in a not so necessarily  great way.

Keep that in mind as our stock markets continue to unwind this year and talks of a coming recession begin being heard more and more.

 

• Market Quick Glance

For those focused on the weekly, year-to-date market index returns, NASDAQ and the Russell 2000 rewarded those folks the most last week as both closed in positive y-t-d territory at the close of business on Friday.

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, April 20, 2018.

–DJIA -1.04% YTD down but less than the previous week’s -1.45%

• 1 yr Rtn 18.87% down from the previous week’s 19.10%

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 -0.13% YTD down but less than last week’s -0.65%

• 1 yr Rtn 13.34% down from last week’s 14.06%

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 3.52% YTD up from last week’s 2.94%

• 1yr Rtn 20.78% down from last week’s 22.42%

NASDAQ reached a brand new all-time high on March 13, 2018 of 7,637.27. The previous high was reached on March 9, 2018 of 7,560.81.

 

-Russell 2000 1.86% YTD up from than last week’s 0.91%

• 1yr Rtn 13.00% down from last week’s 15.18%

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

Returns looking up.

At the close of business on Thursday, April 19, 2018, the average fund that falls under the broad U.S. Diversified Equity Funds heading had a year-to-date total return of 1.62%. +0.32%. That’s up from the previous week’s average.

Small-Cap Growth funds gained the most as the average return here was 6.27% and Dedicated Short Bias Funds proved to have not so hot average returns, -6.97%.

Looking around the world, the average World Equity Fund had an average y-t-d return of 1.60% with Latin American Funds leading the way at 6.42%.

And then there are bond funds. The average here, including all types of bond funds, had a y-t-d return of down ½ of 1 percent.

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?

No matter what the White House has to say about our economy, what’s happening today mixed in with rosy projections about tomorrow can’t really be taken at face value. That’s because ignoring what history has shown us about our economy and the performances of the stock and bond markets have a way of repeating themselves.

On that note, consider the following from a recent Newsweek.com article written by two professors, Steven Pressman at Colorado State University and Robert H. Scott lll, at Monmouth University:

• While the Great Recession has come to an end, people are adding to their household credit card debt and student load debt in a big time way. Today this  nonmortgage household debt is 41 percent above its previous peak achieved 10 years ago in 2018.
• While low interest rates have helped the housing market recover from the housing mess experienced during the early 2000s, the cost of homes has risen while many people a) don’t have the income to qualify for a loan; b) have the down payment to qualify for such a loan; and c) have the credit score to make the dream of owning a home possible.
• American households have 6 to 7 percent less spending power than they did a decade ago.

According to the authors, the U.S. economy is primed for another recession.”We believe it’s not a question of if. It’s a question of when.”

 

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POCKETBOOK:Week ending March 4, 2017

• A winning high in no time at all.

 It only took 24 days for the DJIA to gain 1000 points  when it closed for the first time over 2100.

The only other time that has happened in the history of the DJIA was in 1999 when the Dow rose from 10,000 to 11,000. And that was during the internet boom, according to CBSMoneyWatch.

 

• Market Quick Glance

 More ups. More records. Even a birthday…..

Let’s begin with the birthday. On Saturday, March 4, 2017, the S&P 500—-the world’s biggest stock market index—-turned 60!

Investors turn to the S&P 500 index because it provides them with a better overall look at how large-cap stocks are doing than the snapshot the 30 stocks that make up the DJIA do.

Back to the mores….last week  still more highs for the major indices were reached as the  week  came to a close. Details below.

Below are the weekly and 52-week performance results— including the dates each has reached its high according to data from CNBC.com. Data is based on prices at the close of business for the week ending March 3, 2017.

-Indices:

-Dow Jones + 6.29% YTD, up from last week’s 5.36%

• 1yr Rtn +23.97% down from last week’s 26.31%

The DJIA reached a 52-week high of 21,169.11 on March 3, 2017. (Previous all-time high of 20,840.7 was reached on Feb. 23, 2017.)

 

-S&P 500 +6.44% YTD up from last week’s 5.74%

• 1yr Rtn +19.55% down from last week’s +22.67 %

The S&P 500 reached a 52-week high of 2,400.98 on March 1, 2017. (Previous all-time high of 2,368.26 was reached on Feb. 23, 2017.)

 

-NASDAQ +9.06% YTD up from last week’s +8.59%

• 1yr Rtn +24.71% down a lot from last week’s 28.68%

The Nasdaq reached a 52-week high and its all-time of 5,911,79 on March 1, 2017. (Previous all-time high of of 5,867.89 was reached on Feb. 21, 2017.)

 

–Russell 2000 +2,73 YTD% down a hair from last week’s +2.76 %

• 1yr Rtn +29.56% down considerably from last week’s +36.44 %

The Russell 2000 reached its 52-week high and its all time high of 1, 414.82 on March 1, 2017.( Previous all-time high of 1,410.04 was reached on on Feb.21, 2107.)

 

-Mutual funds

Still on the upswing.

The average total return for U.S. Diversified Equity Funds closed up at 5.22% at the close of business on Thursday, March 2, 2017, according to Lipper. That’s up from the previous week’s close of 4.82%.

World Equity Funds were up on average 6.16% with India Region and Latin American Funds continuing to lead the way— up 11.97% and 10.41% respectively, on average.

Looking at the 25 largest mutual funds around (based upon assets), PowerSharesQQQ Trust1 was up the most at 10.50% year-to-date, as of March 2, 2107. Next in performance line  iShares Russ 1000 Gr ETF, up 8.43% and then the American Funds Growth:A, up 7.68%.

The puniest returns out of this group were seen in funds with substantial fixed-income holdings: As in the iShares: Core US Agg Bond fund, up 0.18; the DoubleLine: Total Return; I shares, up 0.24%; and the Met West: Total Return up 0.33%.

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.

 

• Like defense?

If you’re a believer that the new administration is going to increase defense spending big time in the near future, Morningstar covers a half-dozen defence contractor companies that you might to investigate as well.

The Chicago-based investment research group considers these companies as “fairly valued to overvalued” and include Lockheed Martin (LMT); Northrop Grumman (NOC); Raytheon (RTN); General Dynamics (GD); Boeing (BA) and L3 Technologies (LLL).

Make sure to do your own research and homework before investing in these companies. Or anything, for that matter.

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POCKETBOOK:Week ending Aug.6,2016

• High and highs

No matter what your feelings are regarding marijuana, there’s money in pot. Just ask the state of Colorado where taxing that  industry has brought in hundreds of thousands of dollars in tax revenues.

To catch a whiff of that high, investors in shares of Scotts Miracle-Gro Co (SMG) have been rewarded as the stock closed Friday at $79.56, near its  52-week high of $80.25. That’s  up from a 52-week low of $58.83, according to Yahoo Finance.

People have been using Scotts Miracle-Gro  products  for decades for all of their gardening and grass needs. In addition to making gardens grow, SMG also pays a dividend of 2.51%—better than the  current yields on long Treasuries.

Looking ahead, the pot industry doesn’t look to be going up in smoke any time soon. Scotts knows this. And, that fertile soil isn’t the only way to grow weed. Ask any home grower and they will tell you hydroponics is the best way to go.

To that end, one company Scotts has invested in is the Netherlands-based hydroponic equipment maker Gavita Holland BV.

With marijuana legalized in some form in 24 states and DC, it will be on the ballot in November in 12  more.

Like I said, the industry isn’t going up in smoke any time soon.

• Market Quick Glance

The bull doesn’t appear to want to lay down and take a rest just yet.

Below are the closing YTD performance numbers of four popular US indices as of Friday, August 5, 2016, according to Bloomberg. One-year performance figures are also included.

-Indices:

-Dow Jones +8.12% YTD (Back to where it was 2 weeks ago)

• 1yr Rtn +9.56%

-S&P 500 +8.20% YTD 

• 1yr Rtn +7.39%

–NASDAQ +5.13% YTD (A 2 percentage point improvement)

• 1yr Rtn +4.92% (Ditto)

–Russell 2000 +9.35% YTD (Up 1 percentage point)

• 1yr Rtn +3.59% (A big gain from last week’s -0.01%)

 

-Mutual funds

The average U.S.Diversified Equity Fund ended the week up a tad less than it had in the previous week and at 5.23 % as of the close of business on Thursday, August 4, 2016, according to Lipper.

Yawn. Yawn. Equity Leverage Funds gained another 2% with the average fund up 24.65%. Again it had the most positive returns in the entire  gang of U.S. Diversified Equity Funds. Dedicated Short Bias Funds performed the worst—this week down on average 19.53%.

And almost more yawns go out to Precious Metals Equity Funds as this group continues to outperform other Sector Fund types: As of Thursday’s close the average return for them  was up 126.21% YTD. The yawn, however, isn’t really justified as that’s the highest average return for this fund heading so far this year. Lucky you if you’re an investor in one of the top performing funds in this group of 73.

If you’re not, don’t dispare. The average return for all types of Sector Funds thus far this year is a +12.82 %. Double-digit returns— no matter where you get them— are always something to be proud of.

Latin American Funds continue their upward swing gaining 4% from the previous week to close up 34.09% year-to-date.

Visit www.allaboutfunds.com for weekly updates to see 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.

Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.

• Negative Wealth

If you’re not familiar with the term “negative wealth” you’ve probably seen evidence of it. Or perhaps it’s a situation you’re all too familiar with. In short, it means  your debts add up to more than your assets.

According to the New York Federal Reserve, 14% of the U.S. population has negative wealth.

The particulars look like this: Negative wealth households have an average annual income of under $40,000 ($39,077); 19 percent of them own a home; and 36% of those homeowners are underwater on their mortgage payments.

Additionally, most are female, single and single parents.

On the other hand, positive wealth households have an average annual income of more than $86,309; 75% own a home; and just 4% have underwater mortgages.

The kicker is, the education level of negative and positive wealth households is pretty much the same.

Now what does that tell you?

 

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POCKETBOOK: Week ending July 16, 2016

• •Got cash? If not, get it.

I’m going to continue to remind you—okay, harp—about making sure you’ve got a stash of cash that’s readily available and easily accessible. How much do you need? Six months of living expenses. Not six weeks. But six months. If that seems like an unrealistic amount, get over it. Save it.

I could list dozens of reasons why everyone needs to do that, instead I’ll let the richies lead the way.

According to a recent UBS survey of 2,200 high net worth investors, 84 percent think the upcoming election with have an impact on their financial health. Many are choosing to keep 25% of their holdings in cash.

While most of us aren’t richies, having an emergency rainy day stash is essential. Particularly. if  you aspire one day  to be a richie.

• Market Quick Glance

Below are the closing YTD performance numbers of four popular US indices as of Friday, July 15, 2016, according to Bloomberg. One-year performance figures are also included.

But before going there, overall it was a week of wins for stocks. That said, the big question on every talking head’s mind is if this market has more bull in it. As always, time will tell.

In the meantime, time also tells us that bull markets don’t go on forever.

-Indices:

-Dow Jones +7.84%YTD (That’s a gain of over 2% for the week)

• 1yr Rtn +5.14%

-S&P 500 +7.045% YTD ( Also 2% higher)

• 1yr Rtn +3.91% (This index lost ground during the week)

–NASDAQ +1.19% YTD (An improvement of about 2%)

• 1yr Rtn -2.15% (Lost ground)

–Russell 2000 +6.99% YTD (About a 2% gain in one week)

• 1yr Rtn -3.42%

-Mutual funds

Through Thursday, July 14, 2016 the average U.S.Diversified Equity Fund ended the week with an average YTD return of +4.86 %, according to Lipper. That’s a gain of 3.4% from last week’s  1.44%.

And how about those Precious Metals Equity Funds! As of Thursday’s close the average return for this group of 73 was up 120.25% YTD. Frank Holmes, CEO of U.S.Global Investors, thinks there’s still room to go.

On the other hand, Commodities  Precious Metals Funds, while up 29.46%, lost a bit of ground from their previous week’s close of up 29.52%

The average return for Sector Equity Funds was up 12.52% YTD. There are 2,295 funds included under this heading.

Latin American Funds continued to gain ground—up on average more than 8% from the previous week: Its YTD return was +31.05%.

Visit www.allaboutfunds.com for weekly updates to see 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.

Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.

• Our “rigged” economy

Seems as though a number of surveys show  an awful lot of Americans now believe our economy is “rigged.”

Although that’s one of Donald Trump’s many claims,  apparently the thinking isn’t simply limited to Republicans or Democrats, Hispanics, whites, blacks, etc. It is across the board out-loud thinking.

Survey answers show the bottom line reason for that  is because of the belief that our economy is set up to benefit a very few—and that’s a valid point.

But  the “rigged” word  bugs me.

According to Dictionary.com, rigged means “ to manipulate fraudulently.”

TheFreeDictionary.com writes that rigged means, “To manipulate dishonestly for personal gain: rig a prize-fight; rig stock prices.”

TheUrbanDictionary.com defines it like this: “1. The word rigged is used to describe situations where unfair advantages are given to one side of a conflict.
2. Describes the side of the a conflict that holds an unfair advantage. “

There is definitely an “unfair advantage” when it comes to  wages and the humungously broad and unnecessary wage gap that exits in America today.  And the result  of that disadvantage is that it has made it difficult—if not impossible—for millions and millions of individuals to live the life they had hoped, dreamed and planned for.

But I’m not sure our economy as “rigged” as it is governed by the greedy. And being greedy has never done anybody,  any country, or any civilization any good.

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