Tag Archives: Lipper

POCKETBOOK: Week ending June 17, 2018

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  • Not so subtle signs

The great divide between our two America’s — one in which the wealthy enjoy the fruits of their fortunes and the much larger group that finds making it harder and more challenging than ever—is not-so subtly showing signs of widening.

On the one hand, the Fed says the economy is roaring along just fine even guestimating GDP growth could hit something like 4% this year. On the other, the second rise in key short-term rates this year from 1.75 to 2% may add pennies to one’s saving accounts and money market fund accounts. But, it is also making a bigger dent  for those  who will see increases on the interest rates charged by credit card accounts,  rates on mortgages, variable line-of-credit accounts,  car loans. etc.

And everybody is noticing. Two examples: CNBC reported that half of Americans aren’t taking summer vacations this year and  real estate developers are offering super deals for new home buyers.

In my local paper on Friday (6/15/18), I saw  new home developers offering  mighty attractive discounts to entice  new home buyers to buy.

At On Top of the World, a 55+ community in Ocala, Florida where new homes are priced from the $160s to over $400s, ran a full-page read, “GET MORE FOR LESS” offering a 25% on all options.

Divosta, a developer with a huge and long-standing presence in Palm Beach County, was —get this— giving a free pool with screen enclosure—to new home buyers at their Sonoma Isles development in Jupiter through June 18th.

That said, my adult life’s experience in South Florida has shown me that whenever  real estate developers start discounting their prices and/or offering what’s typically costly upgrades, it’s been a sign that they’re concerned about sales.

The good news here is  anybody who can qualify and afford a new home at either of these developments has got to love getting any kind of discount or a new pool.

The bad news is  not everyone can either qualify for or afford to buy a new home these days. And even small interest rate hikes upward only exasperate that problem.

Now imagine what a number of interest rate hikes upward will do.

 

  • Market Quick Glance

LISTEN UP!!!! Two, yes, not one but two of the indices followed here scored big last week: Both the NASDAQ and the Russell 2000 hit new all-time record numbers last week. Yahoo for  them.

That’s something to crow about particularly since the rest of the investing arena is in a little bit of quandary with interest rates on the rise. As we all know, any move in any direction of interest impacts all sorts of things including equities.

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, June 15, 2018.

DJIA 1.50% YTD ouch as that index is down again from the previous week’s return of 2.42%

  • 1 yr Rtn 14.27% big downward move from the previous week’s 19.52%

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 3.97% YTD up a hair from last week’s 3.94%.

•1 yr Rtn 14.27% up a bit from last week’s 14.19%

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 12.21% YTD a whopping big move up from last week’s 10.75%

  • 1yr Rtn 25.64% also a big up from last week’s 20.94%

Nasdaq reached a BRAND NEW ALL-TIME HIGH on June 14,2018 of 7,768.6. The previous highs was reached on March 13, 2018 of 7,637.27

 

-Russell 2000 9.66% YTD up from last week’s 8.92%

  • 1yr Rtn 19.42% up from last week’s 18.15%

The Russell 2000 reached a BRAND NEW ALL-TIME HIGH on June 12, 2018 of 1,686.37. The previous high was reached on January 24, of 1,615.52.

 

-Mutual funds

Last week’s data not available yet. Data below is from previous week:

The total return performance of the funds under the U.S. Diversified Equity Funds heading enjoyed an average return of 5.11% at the close of business on Thursday, June 7, 2018, according to Lipper. That’s up a lot from the previous week’s average total return of 2.84%.

In the big time skids this year are Latin American Funds. Of the 33 that Lipper tracks, the y-t-d average total return was underwater at -12.00%.

Other World Equity Funds that haven’t fared well so far this year was India Funds, -7.50%. And in third underwater place Emerging Markets Funds, -1.38%.

Overall, World Equity Funds are up 0.90%.

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.

 

  • Golden opportunities?

If you’re a believer in Morningstar data and research, the pros over at that Chicago-based firm aren’t expecting much in returns from that precious metal we call gold.

In a recent column by Kristoffer Inton, “Gold Steady in Face of Rate Hikes”, had this to write about the recent the impact of interest rates on gold: “This rate doesn’t change our view…. We continue to expect the gold price to fall to $1,225 per ounce by then end of 2018…. “

He continued:  “Additionally, although the recent rise in inflation bodes well for gold, we think that higher inflation will only spur a more rapid pace of rate hikes.”

And then there is this from a recent ETFTrends.com story: “China is the world’s largest consumer of many commodities, including precious metals.

“Tariffs on China could be a game changer for metals markets, ” George Gero, managing director at RBC Capital Markets, told the WSJ.”

The ETFTrends.com story points out that one area precious metals are making positive strides is in inverse or bearish ETFs.

If you’re a fan of gold, that’s an area worth investigating.

Sometimes down pays up.

 

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POCKETBOOK: Week ending June 9, 2018

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Telling lines.
  • Fickle trickle

Funny how the average guy and gal have to use a magnifying glass to see the effect of Trump’s trickle down economic policies in their day-to-day lives.

Yes, businesses are expanding, the unemployment rate is down and the stock market has yet to stumble and fall. But unless you’re in the top 10 percent of wage earners, odds are your salary hasn’t increased much over the past couple of years.

Wealth equality in the U.S. is and has been a rising problem for decades. Statistica.com reported that in 2017, the lower-income 50 percent of the population owned about 1.1% of total wealth while that sliver of the top 1% owned 35% of it.

That spread doesn’t bode well for the majority of Americans who hope and believe that their hard work will come with huge financial rewards for them and their families in the coming years. But while hard work is a virtue in itself, it comes with no guarantees of everyone becoming a multi-millionaire.

That said, every working person can build a nest egg. How big that nest egg grows to depends more on goal-setting, focus and perseverance than it does most everything else—including market conditions and government policies.

 

  • Market Quick Glance

Last week, NASDAQ made the greatest gains, now up over 10% for the year, behind it was the Russell 2000 with a year-to-date return of nearly 9%.

So it continues to be a kinda sorta small-cap world.

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, June 8, 2018.

DJIA 2.42% YTD  up again and a lot from the previous minus week’s close of -0.34%

  • 1 yr Rtn 19.52% down from the previous week’s 16.51%

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 3.94% YTD up from last week’s 2.28%

  • 1 yr Rtn 14.19% up from last week’s 12.53%

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 10.75% YTD up from last week’s 9.43%

  • 1yr Rtn 20.94% up a hair from last week’s 20.93%

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 8.92% YTD up from last week’s 7.32%

  • 1yr Rtn 18.15% up from last week’s 18.05%

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

Following the indices returns, the total return performance of the funds under the U.S. Diversified Equity Funds heading enjoyed an improved average y-t-d return–it was  5.11% at the close of business on Thursday, June 7, 2018, according to Lipper. That’s up a lot from the previous week’s average total return of 2.84%.

In the big time skids arena this year are Latin American Funds. Of the 33 that Lipper tracks, the y-t-d average total return was underwater at -12.00%.

Another of the  World Equity Funds that haven’t fared well so far this year was India Funds, -7.50%. And in third underwater place Emerging Markets Funds, -1.38%.

Overall, World Equity Funds are up 0.90%.

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? Yes. Sometime.

Lots of chatting about an upcoming recession. Comedian and political commentator Bill Maher even put his two cents worth in the other night with respect to it.

Not in favor of his words. Then again, his point is well taken as American voters have a historic tendency to vote with respect to how fat their pocketbooks are. So a recession happening prior to voting time could have a big impact in taking Trump out of office.

That said, recessions happen. They are a natural part of our economic world. Always have been. Always will be.

That means, it should come as no surprise at all to read that economists at the National Association of Business Economics are foreseeing a recession beginning next year or in early 2020.

And why do they think that? Well, after a steaming economy and a bull market running something like 9,10,11 years or so means it’s a sooner-or-later, for sure, natural event that’s gonna happen. Sometime.

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POCKETBOOK: Week ending June 1, 2018

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•More bull?

Wall Street’s talking heads are never at a loss of words. Or outlooks. Here’s what one bull sees.

Ed Yardeni, president of Yardeni Research thinks that there is still plenty of money to be made in this market, has a S&P 500 index year-end target price of 3100 —that’s 13% above where it stands today—and sees the small-cap rally continuing.

In a recent CNBC.com story, Yardeni said, “Small cap stocks are on fire, at record highs, because they are not as exposed to the global economy in currency and protectionism.”

And, he’s  not alone in his small-cap rally thinking.

We shall see.

 

  • Market Quick Glance

It’s been a small-cap world for anyone paying attention to the NASDAQ and Russell 2000 indices as each has made some nice strides in a positive direction lately and last week.

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, June 1, 2018.

DJIA -0.34% YTD once again back into minus territory from the previous week’s

+0.14%.

•1 yr Rtn 16.51% down from the previous week’s 19.61%

  • 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 2.28% YTD up from last week’s 1.78%

  • 1 yr Rtn 12.53% down a tad from last week’s 12.68%

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 9.43% YTD up a heap from last week’s 7.68%

  • 1yr Rtn 20.93% up from last week’s 19.80%

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 7.32% YTD a jump up from last week’s 5.95%

  • 1yr Rtn 18.05% down from last week’s 17.60%

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

Your basic equity fund lost a little ground last week.

The average performance of the funds under the U.S. Diversified Equity Funds heading had a total return of 2.84% year-to-date at the close of business on Thursday, May 31, 2018. That’s lower than it was one week before, (May 26), it was 3.34%.

It’s been a Small-Cap Growth funds’ world lately as the average y-t-d return for them clocked in at 10.75% last Thursday. That’s up from the previous week.

Science & Tech funds with home grown as well as global companies in their portfolios continue to do well, too.

Not so hot have been World Equity Funds—the average one’s return was underwater at -0.86% last week.

World Income Funds have fared worse with the average y-t-d total return of the 750 funds that fall under this heading of -2.57%.

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.

 

  • Our poor kids

No matter how great you think last week’s job report was, or how great you think the economy is, if you step back and take an objective view, President Trump’s personal business management style for America has rewarded the wealthy far more than it has the middle, and lower classes.

Philip Alston, a U.N. human rights investigator released a report that he will present to the United Nations Human Rights Council later this month, pointed out that while Trump has cut benefits and health insurance to the poor in America, his reforms have been “financial windfalls” for the mega-rich and large corporations.

Nothing new there. But what I found was of particular importance was how hard hit his policy changes have been for  our kids.

Alston said that nearly 41 million people, 12.7 percent, live in poverty in the U.S. Of them 18.5 million live in extreme poverty and one in three kids are poor.

Worse yet, he said that the United States has the highest youth poverty rate among industrialized countries.

That’s nothing to be proud about no matter what figures the Trump Administration boasts about.

 

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POCKETBOOK: Week ending May 26, 2018

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  • Uber-Rich Goal Setting

Having a personal goal of a retirement account with $1 million in it is noble, even though 1,000,000 won’t necessarily get many very far in retirement. Certainly not as far as it did 20, 30 or definitely 50 years ago. Nonetheless, that target figure is worth shooting for for the masses.

For the super elite, however, it’s chump change.

According to Bloomberg, in the world of private bankers who cater to the uber-wealthy, having $25 million in investable wealth makes one considered rich and provides the “basic service” from private wealth bankers.

But wait. There’s more.

Business Class for the uber-wealthy in a private banker’s eye takes $100 million; First Class, $200 million; and Private Jet Rich, $1 billion.

Set your goals as your needs dictate.

 

  • Market Quick Glance

Once again it was the NASDAQ and Russell 2000 indices where positive strides were recorded last week.

If the indices are telling investors anything, it’s to have a diversified portfolio.

Nothing exciting about that news except that it’s always wise advice.

Last week Bespoke Investments listed some of NASDAQs best and worst performing stocks so far this year. Here are the names of the most notable in each category:

  • Top 3 performing stocks from the NASDAQ 100:

Netflix (NFLX) up 81.96%; Micron (MU) up 12.41%; and Align Technology (ALGN) up 42.69%.

  • Three biggest losing stocks from the NASDAQ 100:

DISH Network (DISH) down -36.15%, NetEase(NTES) down -35.37%; and Dentsply Sirona (XRAY) down -29.80%.

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, May 25, 2018.

DJIA 0.14% YTD moved up into plus territory from the previous week’s -0.02%

  • 1 yr Rtn 19.61% down from the previous week’s 19.61%

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 1.78% YTD up a tiny bit from week’s 1.47%

  • 1 yr Rtn 12.68% down from last week’s 14.68%

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 7.68% YTD up a little from last week’s 7.24%

  • 1yr Rtn 19.80% down from last week’s 21.46%

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 5.95% YTD up a hair from last week’s 5.93%

  • 1yr Rtn 17.60% down from last week’s 19.51%

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

With the beginning of summer fast approaching, and the old saying reminding investors to sell in May and go away, that play hasn’t been particularly a good one within the mutual fund arena—so far.

For example,the average performance of the funds under the U.S. Diversified Equity Funds heading was up 3.34% year-to-date at the close of business on Thursday, May 24, 2018. That’s much higher than it was three weeks before– on May 3 it was 0.65%.

Small-Cap Growth funds have made the biggest gains and were up on average over 10%,

Also with heading averages up 10% or more year-to-date were Science & Technology Funds, 10.98%; Global Science & Technology funds, 10.79%; and Commodities Energy Funds, 12.99%.

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.

 

  • Credit Card Debt Growing

Not sure who in Washington has noticed, but it has been apparent to most folks living across America that the cost of living is going up. Who hasn’t noticed that the increased cost of a gallon of gas makes an impact in the amount of disposable cash one has in their pockets? Or that groceries, even at places like Aldi’s, cost a little more? And that a buck or two increase in one’s hourly pay doesn’t translate to much?

So it may come as no surprise that people are using their credit cards more and more. And, not paying their balances off in full each month.

According to MyBudget360.com, there is more than $1 trillion in credit card debt outstanding in America these days.  Most of that debt is on cards issued by smaller banks.

From that source: “Credit card delinquencies at more than 4,700 small US banks are not past the figure reached at the peak of the last financial crisis.”

Oh my.

 

 

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POCKETBOOK: Week ending May 18, 2018

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  • The BEST investing advice EVER

Sometimes the most realistic investment advice comes in the form of a simple truth.

According to Bob Veres, editor of Inside Information as quoted in an ETFTrends.com piece last week, Veres said: “As it turns out, the predictions made by financial experts are no better than those made by gypsies looking into crystal balls, soothsayers gazing at the entrails of a sacrificed animal or wizards with tall caps who gaze into space. In fact, the financial experts might even be LESS reliable than those other charlatans.”

In other words, article author Rick Kahler, wrote: “The problem with accurately predicting what direction the US stock market is heading in the near future is that no expert really knows.”

And as Lily Tomlin’s character Edith Ann used to say, “ And that’s the truth.”

 

  • Market Quick Glance

Last week’s worst performance was in the DJIA—it slumped back into minus territory but not by much—a hair, if you will.

The place to play recently? NASDAQ and Russell 2000 indices. NASDAQ was up the most, Russell 2000 and then the S&P 500.

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, May 18, 2018.

DJIA -0.02% YTD back into minus territory from previous week’s +0.45%

  • 1 yr Rtn 19.61% up from the previous week’s 18.70%

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 1.47% YTD down from week’s 2.02%

  • 1 yr Rtn 14.68% up from last week’s 13.92%

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 7.24% YTD down from last week’s 7.24%

  • 1yr Rtn 21.46% up a tiny bit from last week’s 21.04%

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 5.93% YTD up from last week’s 4.64%

  • 1yr Rtn 19.51% up a lot from last week’s 15.58%

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 the May 3 report:

The average fund that falls under the broad U.S. Diversified Equity Funds heading had a year-to-date return of -0.53% at the close of business on Thursday, May 3, 2018, 0.65%, according to Lipper. That’s a fall from the previous week’s 0.65% average.

Small-Cap Growth funds ended the week with an average y-t-d return average of 4.10% —down from the previous week’s 6.27%

Then again Dedicated Short Bias Funds had improved and were down only -4.25% instead of -5.43% from the previous week.

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 a million in your 401(k)? Good. But keep saving.

Once upon a time having a retirement account with one million bucks in it was a big deal. Today, that ain’t necessarily so.

Fidelity Investments reports that at the end of the first quarter of 2018, there were about 50,000 more 401(k) plans with balances of $1 million or more than there were last year. That’s a figure increase from 108,000 to 157,000. Also, that contributors have increased the amount they save.

That’s all good news, accept that all that moola may not be enough to live a comfortable  retirement life.

In a FoxBusiness.com report, author and tax attorney Rebecca Walser reminded investors that what goes up must come down. “Most major crashes occur within a short 2.5-month timeframe, and even Warren Buffett recently warned shareholders that a 50% loss should be expected.

“If someone is 10 years or less from retirement, they need a plan to forgo the large downturn that is coming this time around – they do not have the investment horizon left to recover from such a portfolio loss.”

Geez. One can’t help but wonder when–if– the need for huge bucks to live out our old age will ever stop.

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POCKETBOOK: Week ending May 5, 2018

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  • Buffett’s advice

Warren Buffett has some investing advice all of us can learn from—even for those who don’t own any Apple stock—a stock he currently loves.

Three tidbits outlined in a recent CNBC.com story include:

  1. Circle of competence. Basically this means understanding and knowing if the business you are buying is making money and that you feel confident that money-making will be sustainable going forward.
  2. Piece of a business. Buffett was influenced big time by Ben Graham’s classic book “The Intelligent Investor”. Read it.
  3. Margin of safety. Buffett likes value and when looking at purchasing a company  “he wants the value at his entry price to be much lower than his value estimate for the company”. That spread difference is what he calls the “margin of safety”.

Why listen to Buffett’s advice? Guess it’s because from 1965 to 2017, Berkshire Hathaway’s stock’s annual return was 20.9% compared to that of the S&Ps 9.9%.

 

  • Market Quick Glance

The Russell 2000 and NASDAQ were the indices that scored the most on the upside of things last week.

And one more time: It’s been since January when, at that time, new all-time highs were reached on three of the four indices followed below: The DJIA, the S&P 500 and the Russell 2000. NASDAQ hit its last new high in March.

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, May 4, 2018.

DJIA -1.85% YTD down more than the previous week’s -1.65%

  • 1 yr Rtn 15.80% down a hair from the previous week’s 15.87%

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 -0.38% YTD down more than last week’s -0.14%

  • 1 yr Rtn 11.46% down from last week’s 11.77%

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 4.44% YTD up from last week’s 3.13%

  • 1yr Rtn 18.67% up from last week’s 17.70%

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 1.96% YTD up from than last week’s 1.35%

  • 1yr Rtn 12.73% up from last week’s 9.82%

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

The average fund that falls under the broad U.S. Diversified Equity Funds heading had a year-to-date return of -0.53% at the close of business on Thursday, May 3, 2018, according to Lipper. That’s a fall from the previous week’s 0.65% average.

Small-Cap Growth funds ended the week with an average y-t-d return  of 4.10% —down from the previous week’s 6.27%

Then again, Dedicated Short Bias Funds’ averagre returns had improved and were down only -4.25% instead of -5.43% from the previous week.

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.

 

  • Not running out of money

Well here’s some could be good news for retirees who don’t have $1 million or more bucks saved in their retirement accounts.

According to a Reuters piece by Gail Marks Jarvis, “The myth of outliving your retirement savings”, folks with less than $500,000 in savings on average spend “just about a quarter of it during the first 20 years of retirement.”

That data is from a study by Sudipto Banerjee of the Employee Benefit Research Institute.

Huh. Not sure I believe that but if it’s true, wouldn’t that be nice to know.

 

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POCKETBOOK: Week ending April 27, 2018

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  • Amazon’s piggy Prime fees

Figure pretty much everybody on Earth is familiar with Amazon, the company.

As for it’s Prime arm, that benefits program didn’t begin until 2005. Since then, the program has garnered 100 million members. That’s a boatload of members, if you ask me. And at $99 a year for membership, the dollars racked in from it is mountainous—as in an almost unfathomable $9,900,000,000. Said out loud, that’s “9 billion 900 million dollars”. Which, apparently, isn’t enough for Jeff Bezos’ company to keep it going.

So next month –on May 11– an Amazon Prime annual membership fee is going up not 10 but 20% to $119.   That translates to 100 million Prime members paying a total annual membership fee to Amazon of $119. Said out loud that’s “ 11 billion 900 million dollars.”

And that’s a pigish amount.

So, if you’re in the camp that remembers how it was often said that Amazon doesn’t make any money, it’s time to rethink that.

According to Redode.net, in a piece dated Feb. 1, 2018, the headline read:“Amazon has posted a profit for 11 straight quarters—including a record $1.9 bilion during the holidays.”

Hum.

  • Market Quick Glance

A downer of a week for all but one (NASDAQ) of the major indices year-to-date returns followed here. Additionally, all four of their 1-year reurns were lower than they were the previous week.

FYI, it’s been since January that  new all-time highs were reached on three of the four indices followed below; the DJIA, the S&P 500 and the Russell 2000. NASDAQ hit its last new high in March.

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 27, 2018.

 

DJIA -1.65% YTD down more than the previous week’s -1.05%

  • 1 yr Rtn 15.87% down from the previous week’s 18.87%

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 -0.14% YTD down a hair more than last week’s -0.13%

  • 1 yr Rtn 11.77% down from last week’s 13.34%

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 3.13% YTD down from last week’s 3.52%

  • 1yr Rtn 17.70% down from last week’s 20.78%

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 1.35% YTD down from than last week’s 1.86%

  • 1yr Rtn 9.82% down from last week’s 13.00%

 

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

At the close of business last Thursday, April 26, 2018, the average fund that falls under the broad U.S. Diversified Equity Funds heading had a year-to-date return of 0.65%, according to Lipper.

Small-Cap Growth funds that were up on average 6.27% a week earlier, lost ground and now had an average return of 4.42%.

On the other hand, the average return for Dedicated Short Bias Funds had improved and were now down only -5.43% instead of their score from the previous week of -6.97%.

Anybody who wants to jump up and down and boast about their fund’s returns must be shareholders in science and tech funds as the average Science & Technology Fund’s y-t-d return is 5.46% with the Global Science & Technology fund not far behind at 5.25%.

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.

 

  • Fund fees headed down

Morningstar began tracking the fees on mutual funds 18 years ago in 2000. Since then, fees for funds have dropped dramatically. As they should have.

According to their Press Release dated April 26, 2018, “Morningstar estimates that investors saved more that $4 billion in fund fees in 2017 by continuing to gravitate toward lower-cost fees.”

Lowering fees is a big plus for fund shareholders—not so much for the fund company.

That said, every penny counts when it comes to an investor making any money from their fund or ETF investments.

Morningstar reported that most investors choose lower-priced funds. The three fund families offering the lowest asset-weighted fund ratios include Vanguard with its average expense ratio of 0.10%; State Street Global Advisors, 0.16%; and iShares, 0.25%.

POCKETBOOK: Week ending April 14, 2018

  • FullSizeRender(69) •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 April 14, 2018

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  • Golden

Good news this week for gold investors. On Wednesday, gold futures traded at an intraday high of $1,369.30 an ounce, according to Gary Wagner’s Kitco Commentary on Friday, April 13, 2018.

The June Comex contract wasn’t quite that high at the close of business on Friday ($1,348.60), but even so, for the week gold had enjoyed an $11 an ounce  gain.

That’s a big deal because this precious metal has had a hard time making any kind of sustainable gains over the past few years. And, in a jumpy market like we’ve all been a part of, one might consider that a bit of an oddity.

That said, the big takeaway here is that you’ve got to go back to August 2016 to find gold trading at that high a level. “More importantly,” writes Wagner, “ the highs achieved during that rally were the first occurrence of a higher high since the multiyear correction (that) began in the middle of 2011.”

Perhaps it’s time to reconsider the value of this precious metal for ones investment portfolio other than see its worth only in golden bangles, earrings or as a cap to top off one of your back molars.

 

  • Market Quick Glance

A better performance week for stock index results than the week before with the downs not as down and the ups more up.

Look at the 1-year returns and one might even begin to wonder what all the bears on Wall Street are concerned about. Then again, the only time that 1-year returns that seem to matter to the average investor is when the end of the year 52-week results are in.

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 13, 2018.

 

DJIA -1.45% YTD down but less than the previous week’s -3.18%

  • 1 yr Rtn 19.10% up from the previous week’s 15.82%

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 -0.65% YTD down much less than last week’s -2.59%

  • 1 yr Rtn 14.06% up from last week’s 10.48%

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 2.94% YTD way up from last week’s 0.17%

  • 1yr Rtn 22.42% way up from last week’s 17.62%

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 0.91% YTD up from than last week’s -1.45%

  • 1yr Rtn 15.18% way up from last week’s 10.91%

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

Lipper’s weekly mutual fund performance figures not available yet. Will post them when received.

Till then, here’s a repeat look at last week’s report: At the close of business on Thursday, April 4, 2018 the average fund that falls under the broad U.S. Diversified Equity Funds heading had a year-to-date return of +0.32%. That’s up—yes up—from the previous week’s average of -0.37%.

Large-Cap and Small-Cap Growth funds were up on average well over 3% last week. Science & Technology Funds and Global Science & Technology Funds both up at 4.92 and 5.08% respectively.

Latin American Funds, too, were up–averaging almost 6% y-t-d.

The biggest loser fund type of all were Energy MLP, down on average -10.02%.

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.

 

  •   Credit Risks

The ability to raise, borrow and repay money is great deal. And one individuals as well as businesses count on. But like everything else within the world of money, risks exist and timing is everything.

Last week, Jack Ablin,CFA and Chief Financial Officer at Cresset Wealth Advisors published a piece titled “Credit Conditions and Risk Taking”.

From the piece: “The easiest way to gauge real time credit conditions is by observing the yield differential between 10-year, BBB bonds and 10-year Treasury notes. Since the bond market is roughly seven times the size of the stock market, the yield premium lenders require to extend credit to lower-quality borrowers is a useful barometer.”

While currently credit conditions are “favorable”, Ablin thinks that rising credit spreads can be an early warning sign of troubles ahead.

The chart below  provides additional insight on the subject.

img_46191.jpg

 

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POCKETBOOK: Week ending April 7, 2018

IMG_1835
Lots of worries over what could happen if Trump starts a trade war. This Op-Ed cartoon is from the Sunday, April 8, 2018, Palm Beach Post.
  • Trading places

Lots of talking heads have lots of things to say about the likelihood of trade wars developing should the mighty US of A decide to let President Trump rule and impose additional tariffs on goods and services from places where tariffs already are in place.

In general, many talking heads agree that there is an imbalance in our trade agreement with China. And many think that getting into a tariff war with that country could be very disruptive and costly to us, as in the average consumer.

What’s important to remember is that no new tariffs have been imposed on any country, anywhere,  yet.

It’s also important to remember that it’s really smart to remember to pick your battles.

 

  • Market Quick Glance

Q: Dear Wise One:

Any perspective investors ought to keep in mind with respect to the markets’ recent volatility?

 
A: Yes.

Right now the stock market is as jumpy as a long-tailed cat in a room full of rockers. And that’s just how it is. Today.

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 6, 2018.

 

DJIA -3.18% YTD down more than the previous week’s -2.49%

  • 1 yr Rtn 15.82% down from the previous week’s 16.28%

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 -2.59% YTD down more than last week’s -1.22%

  • 1 yr Rtn 10.48% down from last week’s 11.52%

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 0.17% YTD down from last week’s 2.32%

  • 1yr Rtn 17.62% down from last week’s 19.43%

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 -1.45% YTD down more than last week’s -0.40%

  • 1yr Rtn 10.91% up a tiny bit from last week’s 10.64%

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

At the close of business on Thursday, April 4, 2018,  the average fund that falls under the broad U.S. Diversified Equity Funds heading had a year-to-date return of +0.32%. That’s up—yes up—from the previous week’s average of -0.37%.

Large-Cap Growth and Small-Cap Growth funds were up on average well over 3% last week. Science & Technology Funds and Global Science & Technology Funds both up at 4.92 and 5.08% respectively.

Latin American Funds, too, were up—averaging almost 6% y-t-d.

The biggest loser fund type of all were Energy MLP, down on average -10.02%.

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.

 

  • ETF returns

 I heard Jack Bogle, Vanguard’s founder, point out that mutual funds have had better returns than exchange-traded funds, ETFs, a point I found worth thinking about. Seems the big push to advertise big time by various ETF brand families is one thing. But, out performing various categories of index funds however, is another.

So, while some consider the ability to buy and sell ETFs throughout the day –as one can do with both stocks and ETFs– is appealing, it isn’t necessariy financially rewarding.

One reason  is that  Bogle thinks ETFs could encourage individuals to trade their holdings more often rather than  holding their investments  for the long term. Doing so, he said makes  it difficult for an investor/trader to outperform the market.

Good point.

Then again, Bogle loves index funds.

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