Tag Archives: stock buybacks

POCKETBOOK: Week Ending Sept. 29, 2018

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  • October High

Turns out, if you’re a fan of #1 hits, October has been the #1 performer in monthly stock market performance over the past 20 years, according to the Bespoke Investment Group.

Looking ahead, time will tell how the 10th month of this year will perform but talking heads continue to guess upward.

Navellier’s Marketmail recent newsletter points out that one of the reasons for the overall stock markets good performance this year has been due to buybacks.

How so?

When a company decides to actually buy back its publicly traded shares, that literally reduces the number of shares available for investors to purchase. As a result, if the stock is a popular one, the more people wanting to purchase shares of the company, the higher its per share price goes.

Popularity pays.

If the stock is not in hot demand,  there are still fewer shares available which is kinda often always a good thing for a corporation’s coffers.

 

  • Market Quick Glance

A downer of a week for all four indices followed here.

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, Sept. 28, 2018.

DJIA 7.04% YTD down from previous week’s return of 8.19%.

  • 1 yr Rtn 18.22% down from the previous week 19.61 %

Most recent DJIA a new ALL-TIME CLOSING HIGH was reached on Sept. 21, 2018 of 26,796.16. The previous high was reached on January 26, 2018 of 26,616.71.

 

-S&P 500 8.99 % YTD down from last week’s 9.58%

  • 1 yr. Rtn 16.09% down from last week’s 17.08%

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 16.56% YTD up from last week’s 15.70%

  • 1yr Rtn 24.68% up a tad from last week’s 24.36%

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 10.49% YTD down from last week’s 11.51%

  • 1yr Rtn 13.96% way down from last week’s 18.57%

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

At the close of business on Thursday, Sept. 27,2018, the average total return for funds that fall under the U.S. Diversified Equity Funds heading was 8.70%. That’s down a bit from two weeks ago when the average was week’s 8.96%, according to Lipper.

Taking a longer look back, the average return for the past 52 weeks was 14.83%. Look out two years—9/22/16 through 9/27/18—the total return for this entire group was 15.17%; for the past three years it was 13.29% and over the past five years, 10.10%.

In other words, the look back is a positive two-digit one.

The same can’t be said for funds that fall under the broad Sector Equity Funds heading. Average total returns there range from: y-t-d of 2.32%; 52 weeks, 6.56%; 2 years, 6.51%; three years, 8.44% and five years, 5.34%.

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.

 

  • Gas Up

AAA reports that gas prices in September were the highest they’ve been in four years. Yikes!

Nationally, that translates to average gas prices at the pump of $3.39 in 2014 to $2.85 in 2018.

Here in Florida, the average price per gallon last month was $2.77. That looks pretty  cheap compared to what it was four years ago—$3.32 per gallon.

Looking ahead, with the price of oil going up up and up, don’t expect our gas prices to go down down down anytime soon.

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POCKETBOOK

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For the week ending March 12, 2016

•The power of stock buybacks
Analysts at HSBC report that it has not been investors who have caused the surge in stock prices ever since the market tanked in 2008-2009, but companies buying their own stocks back.

According to BusinessInsider.com, companies in the S&P500 have bought back nearly $50 billion of their own stock for a total of $2.1 trillion since 2010. The  result has played a part  in  the seven year  bull market.

But what happens when corporations stop buying their stocks back? Will the economy and/or investor interest be enough to carry the market higher,  or,  will time reveal that  buybacks weren’t all that big a deal?  Stay tuned.

•Market Quick Glance
-Indices:
Below are year-to-date performance figures for the major indices through March 11, 2016  according to Bloomberg. To provide a longer performance perspective, 1-year returns have been added.

-Dow Jones -0.53% YTD
1-yr Rtn -0.470 %
-S&P 500 -0.56% YTD
1-yr Rtn +0.62%
-NASDAQ -4.86%YTD
1-yr Rtn -1.25%
-Russell 2000 -3.99% YTD
1-yr Rtn -10.47%

By the end of the week, all four indices mentioned above had seen improvements in their year-to-date performance figures. In fact, the DJIA and S&P500 were both off less than 1 percent. And best of all,  a + symbol has surfaced: The 1-yr return of the S&P500 was up 0..62 percent.

-Mutual funds
Through Thursday, March 10, 2016  the average U.S.Diversified Equity Fund was down 3.83 percent year-to-date, according to Lipper. That’s a tad worse than the previous week’s  performance improvement.

Precious Metals Funds continue to be the hot diggity dog performer under the Sector Equity Funds heading, up 42.42 percent, on average, y-t-d. Latin American Funds, up 11.41 percent, on average, where the winning fund World Equity Fund type.

Of the 25 largest equity funds around, only 5 have plus-side year-to-date performance figures.  The best performer in that group is Vanguard’s Total Bond ll fund, up 1.79 percent so far this year. That’s kinda sorta shocking given that a number of those funds are stock funds.

Visit http://www.allaboutfunds.com for weekly updates to see how 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 http://www.allaboutfunds.com in the left column on the home page.

-Oh those millennials
Expect to keep hearing more and more about this huger than baby boomer crowd, the millennials. Those kids, born between 1982 and 2000, now number 83.1 million and represent more than one-quarter of our nation’s population, according to the U.S. Census Bureau. Baby boomers total 75.4 million.

Given that people are living longer and that the cost of living a life continues to increase, one of the biggest challenges this group faces is saving for retirement.

While studies have shown millennials aren’t so sure Social Security is going to be around when they reach retirement age, the group has its own way of spending/saving.

A Sallie Mae survey found 77 percent pay their bills on time, prefer debit to credit cards, use mobile wallets and check their bank balances frequently.

They also like going out: A study conducted by Personal Capital found millennials spend about 60 percent of their food budget on dining at restaurants.

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