POCKETBOOK Week Ending April 12, 2019

(From Bespoke….I did not include the “Non-Dogs Performance” chart because I was just Dow Dogs hunting.)

• The good Dogs of the Dow

Good news for fans of the Dogs of the Down investment strategy: Their total return is up 13.56% this year. Let’s hear a big “Good girl!” for that.

According to Bespoke, the two tech stocks that have performed the best are IBM, up over 28%, and Cisco, up over 32%. Matching that set, two of the 10 dogs were down as well: Pfizer, down -3.28% and Coca-Cola, off a hair at -0.18%.

 

• Sage advice

From author and wise personal writerJonathan Clements’ recent Humble Dollar newsletter comes this: “But even with the risk of a large short-term market drop, I think stocks remain the best bet for long-term investors. U.S. shares may be richly priced. But those who diversify globally will also have cheaper markets in their portfolio. And let’s face it: With 10-year Treasury notes yielding less than 2.6%, is there any alternative to biting the bullet and buying stocks?”

 

• Market Quick Glance

The performance gods appear to continue smiling on Wall Street as the three indices followed here were up double-digits when last week came to a close.

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, April 12, 2019.

–DJIA 13.22% YTD off a hair from the previous week’s 13.28%.

• 1 yr. Rtn 7.88% up a hair from the previous week 7.83%

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   15.39% YTD up again from the previous week’s 13.07%

• 1 yr. Rtn 8.63% up from the previous week’s 7.33%.

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 20.33% YTD up from last week’s 19.64%%

• 1yr Rtn 11.82% down from last week’s 12.18%

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

At the close of business on Thursday, April 11, 2017, the year-to-date cumulative total reinvested performance of U.S. Diversified Equity Fund was 15.73%, according to Lipper. That’s up from the previous week’s close of 15.05%.

Those Equity Leverage Funds are still tearing it up as, on average, they have returned 30.99%. In fact, of all the dozens of types of mutual funds that Lipper tracks weekly, this group has rewarded shareholders the most so far this year.

Commodities Energy Funds also continue their upward performance with an average return of 24.63%.

And looking around the world China Region Funds have returned about the same at 23.15% while the average World Equity Funds return stood at 13.57% last Thursday.

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.

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POCKETBOOK Week Ending March 22, 2019

 

• Recession coming?

The bond market is signaling a recession could be in our near future and if that is the case, word is recessions typically last around a year and during them stocks don’t always perform horribly during one. The bugaboo in it all, however, is inflation: It and recessions are first cousins and no one is a fan of it. Then again, we’re already seeing price increases on plenty of the items we purchase thanks to the tariffs Trump has imposed.

Oh well, another day in the upside down, topsy turvery pretzel-like who-is-on-first world we all are currently living in.

But I degress.

Back to the recession subject.

From CNBC MarketInsider.com comes this: “As far as recession goes, our economist feels quite optimistic that a recession will be avoided, at least this year. The market is focused not only on U.S. fundamentals but also on what’s happening in China, what’s happening in the rest of the world and how likely it is that political uncertainty, whether through trade policy or whatever, how likely is that to persist and beget a recession,” said Mark Cabana, head of short U.S.rate strategy at Bank of America Merrill Lynch…..
“As recession signals begin to flash and recession probabilities increase, I would expect market participants and people who deploy capital will become more cautious and there’s a risk that it’s a self-fulfilling prophecy,” Cabana said.”

Okay then.

 

• Pew Research’s not-so-bright future study returns

A recent Pew research report has shed light on some not-so-happy or inspiring future outcomes. In other words, looking out 30 years, things aren’t looking very rosy.

Below are a few of results from the Pew Research Center Social & Demographic Trends report dated March 21, 2019:

• 7 in 10 Americans were dissatisfied with the way things are going in this country.
• 60% of those interviewed say the U.S. will be less important in the world by 2050.
• 73% think that the gap between the rich and poor will continue to grow.
• 65% say the country will be more politically devided over the next 30 years.
• And, the majority of those responding expect the economy to be weaker, health care less affordable, the environment worse and  that older Americans will have a harder time makes ends meet than they do now.

Oh my.

 

• Market Quick Glance

A week of mixed year-to-date returns with 1-year returns up.

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, March 22, 2019.

–DJIA 9.32% YTD up a tad from the previous week’s 9.10%.

• 1 yr. Rtn 6.45% way up from the previous week 2.23%

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   11.72% YTD down from the previous week’s 12.59%

• 1 yr. Rtn 5.94% way up from the previous week’s 2.74%.

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 15.18% YTD down a hair from last week’s 15.87%%

• 1yr Rtn 6.64% up from last week’s 2.76%

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

The year-to-date cumulative total reinvested performance for equity funds that fall under the  U.S. Diversified Equity Fund heading was 14.26% at the close of business on Thursday, March 21, 2019, according to Lipper.

Among the 408 Mid-Cap Growth Funds that fall under that huge Diversified category, the average year-to-date return was an impressive 20.17%. Small-Cap Growth Funds, however, performed better: 20.37% for the 592 funds that Lipper tracks in that group.

And then there are Equity Leverage Funds—-the average YTD performance of the 228 funds under that heading was 28.36%.

On the other hand, Dedicated Short Bias Funds’ average YTD return was -20.61%.

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.

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POCKETBOOK Week Ending Oct. 20, 2018

• Caution Ahead

When it comes to taking our short term investing clues from talking heads, no matter what’s happening in the market for every one whose head nods up and down another shakes theirs side to side.

So in this world of nobody knows for sure what’s going to happen day-to-day, if you were to take a step back and look out over the past few months some basic clues do show their heads and ought not be overlooked.

For openers, don’t discount the fact that the major indices are and have been losing ground since reaching new all-time highs in August and September.  Or, that the Fed has increased interest rates three times thus far this year with one more increase expected in December. Both represent ouches of sorts for equities.

As a result, Jeremy Siegel, professor of finance at Wharton, who typically wears a bull’s cap, is now waving a yellow caution flag to investors with respect to  the markets performances through this year and in 2019.

Re a rising interest rate environment, Cresset Wealth Advisors Jack Ablin said: “ It is going to put some headwind on risk-taking which of course has enjoyed “only-child’ stature for the last 10 years.”

Through in the fact that America’s national debt has balooned,  things on Wall Street aren’t as rosey as some heads would like us to believe.

That said, with  caution in the wind, look out five or 10 years from now, and if we haven’t accidentially blown ourselves up or been invaded by aliens who don’t care about money or investing, interest rates and the major equity indices ought to be higher than they currently are. Perhaps.

 

• Market Quick Glance

Round and around and around she goes and where she stops nobody knows.

Depending upon the time of day or the day of the week you decide to check in on what’s happening in the markets, the performance results found could either be pleasing or confounding.

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, Oct. 19, 2018.

–DJIA 2.93% YTD up a tad from previous week’s return of 2.51%.

• 1 yr Rtn 9.85% down again from the previous week 10.94 %

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 3.52 % YTD up a hair from last week’s 3.50%

• 1 yr. Rtn 8.03% down from last week’s 8.48%

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 7.90% YTD down from last week’s 8.60%

• 1yr Rtn 12.78% down from last week’s 13.74%

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 0.43% YTD down from last week’s 0.73% (it was over 10% two weeks ago)

• 1yr Rtn 2.65% down from last week’s 2.76%

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

The market moved up a bit and that positive move was reflected within the mutual fund world.

At the close of business on Thursday, Oct. 18,2018, the average total return for funds that fall under the U.S. Diversified Equity Funds heading was 2.36%, according to Lipper. That’s higher than the 1.13% average return posted one week prior.

While the average performance of the U.S. Diversified Equity Funds was above water, that’s not been the case for the other types of equity funds that Lipper tracks.

So even though y-t-d numbers have improved slightly, the following broad categories of funds have y-t-d average performances that are still underwater.

Below is a comparison of the 10/18 total returns from the previous week’s numbers:

-Sector Equity Funds, on 10/18 enjoyed an average return of -1.59, and improved from the previous week of -2.51%

-World Equity Funds, an average return of -9.30, a bit of an improvement from the prior week’s return of -9.73%

-Mixed Asset Funds, -1.61% is an improvement from the prior week’s return of -2.11%

-Domestic L-T Fixed Income Funds, now- 0.67% is an improvement from prior week’s average return of -0.80%

-World Income Funds, -4.41% is an improvement from the prior week’s average return of-4.86%.

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.

 

• City Opportunities

If San Francisco and New York City are your kind of cities, a report of Glassdoor shows they don’t necessarily offer the best prospects for jobs—and we all know that the cost of living in either can be astronomical.

On the other hand, Glassdoor results show that it’s the smaller cities where work can be found. Add to that the bonus of a lower cost of living it all the makes smaller cities worth looking into.

In case you’re interested, here are the top five cities in Glassdoor’s list of the 25 best cities for jobs in 2018:

1. Pittsburgh, PA
2. Louis, MO
3. Indianapolis, IN
4. Cincinnati, OH
5. Hartford, CT

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POCKETBOOK weekend Sept. 15, 2018

 

•Big Debts

Carry on all you’d like about the economy and a bull market that just doesn’t know when to stop running but make sure not to forget about, or overlook, the debt President Trump’s policies have put in place.

Each of us knows how important facing the debt we have in our personal lives is—and what happens when we overlook it. The same is true for government debt spending: debts need to be addressed and paid back.

According to the Congressional Budget Office, the government has spent a whole lot more during the past 11 months than it has brought in from taxes and revenues.

How much more? $895 billion more. That’s “b” as in “billion”  not “m”. And is a figure that reflects an increase of  33 percent.

Debts matter.

 

• Market Quick Glance

Year-to-date gains still gaining.

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 according to CNBC.com and based on prices at the close of business on Friday, Sept. 14, 2018.

–DJIA 5.81% YTD up from previous week’s return of 4.84%.

• 1 yr Rtn 17.90% down from the previous week 18.97 %

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 8.65% YTD up from last week’s 7.41%

• 1 yr Rtn 16.40% down a hair from last week’s 16.41%

The S&P 500 reached a BRAND NEW CLOSING ALL-TIME HIGH on August 29, 2018 of 2,916.50. The previous closing high was reached on August 24, 2018 of 2,876.16.

 

-NASDAQ 16.03% YTD up from last week’s 14.47%

• 1yr Rtn 24.59% up from last week’s 23.52%

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 12.13% YTD up from last week’s 11.57%

• 1yr Rtn 20.82% down from last week’s 22.49%

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

Moving up a bit.

At the close of business on Thursday, Sept. 13,2018, the average total return for funds that fall under the U.S. Diversified Equity Funds heading was 8.96%. That’s up  from the previous week’s 8.26%, according to Lipper.

It continues to be a Small-Cap Growth Funds world, as funds here now up on average 22%.

Comparing that group’s return with 25 of the largest individual funds around, (largest in terms of assets), and it’s the Invesco QQQ Trust 1 with the best y-t-d performance at 18.92%

Fifteen of the 25 funds in that listing have returns over 10%. Impressive.

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.

 

• Yahoo!! Your SS check is going up!

It’s mo money time, almost.

Every October, along with the ghosts and goblins of the season, the Social Security Administration announces what their cost of living (COLA) adjustments for the coming year will be.

And there is good news for those of us who count on every penny from that government check: It’s going up 2.8%.

Translating that into dollars and cents, the average Social Security check in 2018 is $1400. Beginning in January 2019, if the world doesn’t fall apart by then, that check will see an increase of $39.

While that’s the good news, the not-so-hot good news is that inflation is running around that same amount.

Bottom line: Don’t expect that extra 2.8% increase to have much purchasing power next year.

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POCKETBOOK: Week ending April 14, 2018

• 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.

 

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POCKETBOOK:Week ending March 3, 2018

• 

• Another bull’s birthday

The bull market is going to be 9 this week. In dog years that would be 63 in human years. Okay okay—I know there’s nothing that really connects bulls with dogs and humans but then again, from a human’s point of view, 63 represents an age of maturity. One, that some figure, is an age worthy of retirement.

A look back at the historic lengths of  bull markets between 1926 through 2017 represented by  S&P 500 Index total returns reveals that a bull market lasts on average  9 years, according to FirstTrust (FTPortfolios.com). That puts this market in  watch-for-bears territory.

The longest bull market ,relating to that same index, lasted 13.9 years (from the 1930s-early 1940s), with an average annualized rate of return of 17.2%.  The shortest, 2.5 years in the early 1970s in which the average annualized gain was 25.3%.

Clearly, this bull market has been running a long time but more importantly,  bulls don’t run forever.

Then again, this same source reveals that S&P500 Index  bear markets have a history of being much shorter in length averaging only 1.4 years.

 

• Market Quick Glance

Back peddling and who knows for how long.

If, at the beginning of this year, you invested into an S&P 500 index fund or one that tracks the Russell 2000 you’ve lost money. Not so with the Nasdaq.

Who knows what the year-to-date returns will be by the end of this week but here’s a bet worth considering: If Trump continues to be hell-bent on imposing tariffs on the steel and aluminum that the US imports, the market might have a hell-bent time of moving upward.

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, March 3, 2018.

 

–DJIA -0.73% YTD down and back into minus land–the previous week +2.02%  

• 1 yr Rtn 16.83% down from the previous week’s 22.31%

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 +0.66% YTD significantly down from last week’s 2.76%

• 1 yr Rtn +12.99% down from last week’s 16.40%

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 +5.13 YTD down from last week’s 6.29%

• 1yr Rtn +23.83% down from last week’s 27.74%

Nasdaq latest new all-time high of 7,505.77 was reached on January 26, 2018. The previous high was reached on January 19, 2018 of 7,336.38.

 

-Russell 2000 -0.15%YTD down into minus land from last week’s 0.89%

• 1yr Rtn +9.85% down from last week’s +11.08%

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

Reflecting a not-so-hot week for stocks, the year-to-date average cumulative total reinvested returns for equity funds that fall under the broad U.S. Diversified Equity Funds heading was -0.31% at the close of business on Thursday, March 2, 2018, according to Lipper.

Near the end of 2017, many talking heads were projecting that markets outside of the U.S. were going to be the ones likely to score well this year. That however, hasn’t necessarily been the case. For instance, the year-to-date return for the average World Equity Fund was 0.11% as of Thursday’s close. There are 4,453 funds that fall under that broad heading.

Areas doing well and not-so-well under that heading include: Latin American Funds and China Region Funds, up 6.28% and3.66% respectively, on average. And, on the other hand,  India Region Funds and Global Equity Income Funds were down on average -5.40% and -2.08% respectively.

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.

 

• Kohl’s and Aldi a match made in heaven?

There’s a maybe unlikely new couple coming to town: Kohl’s, the retailer that sends out so many discount coupons to their credit card holders that you wonder how in the world they make any money—-and Aldi, the German grocer that sells its food stuff and goodies at prices that don’t need any coupons to get shoppers into their stores.

The deal is, Kohl’s has too many stores with too much space in them and has plans to cut the size of its footprints, while Aldi is expected to open 900 new stores over the next five years, according to USA Today.

So,  the idea is to lob off some of existing Kolh’s stores space to make Aldi its next door neighbor.

If you’re a shopper of both, the idea makes sense. If you’re not, it might be time to try shopping at either.

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