Tag Archives: Wall Street

POCKETBOOK Week Ending Feb.15, 2019

 

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 Happy Presidents Day to you  from four of our most outstanding past presidents.

 

 

  • Got Debt? No Problem?

Way back in the last few decades of the last century when I first began selling municipal bonds, one of the roads to financial success for a new salesperson—-according to management—was to get yourself into debt. Big debt. You know, the kind of debt that gets you to buy that new BMW 5 series you’ve always wanted when what you really could afford was a used Toyota. The reasoning behind management’s thinking was that responsible salespeople with debt will work hard to pay off—or down—their debts. And while that really didn’t follow the Minnesota money logic I was raised with, I was in Florida after all and things, as we all have come to learn, can be very different on Florida’s Wall Street.

I tell you this because that kind of money management logic still exists today. And, still plays a big part in how many people manage their own personal finances as well as how our government manages its debts.

According to a recent Wall Street Journal story, our US annual budget deficit will  top $1 trillion in three years, by 2022. The key to managing that debt and seeing that its gets tended to is simple: America’s growth rate has to keep growing and wind up greater than what the cost of what carrying that debt is.

It’s a keep working kind of thing.

Trouble is, America’s growth rate, its GDP, changes year to year. Much like how one’s salary or annual income can.

Knowing that and the risks inherent in any changing environment, life has taught me that it’s best to live below one’s means than it is to hope for some future income that may or may not materialize.

 

  • Market Quick Glance

Big time moves upward for year-to-date returns for the indices below. Big time slides backwards for 1-year returns.

Below are the weekly and 1-year index performance results for the three major indices—DJIA, S&P 500 and NASDAQ — including the dates each reached new highs. Data is according to CNBC.com and based on prices at the close of business on Friday, Feb.15, 2019.

DJIA 10.96% YTD up plenty from the previous week’s 7.63%.

  • 1 yr. Rtn 2.71% down bigly from the previous week 5.22%

Most recent DJIA a new ALL-TIME CLOSING HIGH was reached on Oct.3, 2018 of 26,951.81. The previous high was reached on Sept. 21, 2018 of 26,796.16.

 

-S&P 500   10.72 % YTD up lots from last week’s 8.02%

  • 1 yr. Rtn 1.63% down plenty from last week’s 4.92%

The S&P 500 reached a BRAND NEW CLOSING ALL-TIME HIGH on Sept. 21, 2018 of 2,940.91. The previous closing high was reached on August 29, 2018 of 2,916.50.

 

-NASDAQ 12.62% YTD up plenty from last week’s 9.99%

  • 1yr Rtn 2.98% way down from last week’s 7.69%

Nasdaq reached a BRAND NEW 52-week CLOSING HIGH on August 30, 2018 of 8,1333.30. The previous high was reached on August 24, 2018 of 7,949.71.

 

-Mutual funds

Repeat from January:

Looking up.

At the close of business on Thursday, Jan. 10, 2019, the total return for the average stock fund under the broad U.S. Diversified Equity Fund heading was 4.70%, according to Lipper.

Looking at the fund types with the highest year-to-date gains under the various headings shows the following:

-U.S. Diversified Equity Funds average, 4.70%; highest Equity Leveraged Funds, 11.08%; lowest, Dedicated Short Bias Funds, -8.88%

-Sector Equity Funds average 4.88%; highest Energy MLP Funds, 11.74%; lowest Alternative Managed Funds, -2.20%

-World Equity Funds average 4.07%; highest Latin American Funds, 9.01%; lowest India Region Funds, -1.23%.

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

  • Recession Ahead?

A recent Bloomberg.com story, noted that S&P 500 profits are expected to fall in Q1.

From that piece, pub date 2/16/19 by Titiana Darie, titled “Wall Street Is Split on Profits: Does an “Earnings Recession” Loom?” come these words worth considering:

“Based on the average of analysts estimates, U.S. firms are on the cusp of suffering two consecutive quarters of profit declines, the common definition of a recession. Earnings will contract in the first quarter, and while a small increase is currently projected for the following period, that is likely to evaporate. Analysts have been lowering forecasts since the start of the year as companies continue to slash outlooks, citing everything from a stronger dollar to weaker demand in China and rising costs.”

 

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POCKETBOOK Week Ending Dec. 8, 2018

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  • Looking Down Looking Back

There’s no ignoring the performance of equities these days and that’s a good thing. A correcting or bear or underwater market reminds every single investor—and non-investor—that: “Yes, Virginia, stock prices don’t always climb upward as they have for the past almost 10 years.”

So as you review your portfolio, consider that there are always investment opportunities no matter what’s happening on Wall Street. Bunches of investors have made their fortunes investing when equity news hasn’t been so hot.

Furthermore, taking a longer look back on your investment returns may show you things you’ve forgotten.

For instance, The Bespoke Investment Group publishes its “Bespoke 50” list of growth stocks in the Russell 3,000.

Bespoke began publishing the list in 2012 and since that time returns have beaten the S&P 500 by 80.5%.

Today, that list is up 176.8% since inception while the S&P 500’s gain (through 12/6/18) was 96.2%.

So Virginia, things might not be as bad as they appear.

 

  • Market Quick Glance

Ed Clissold, a bear market official at Ned Davis Research, says that the bear market is officially here. At the same time, he’s optimistic about next year and expects to see a rally during the second half of 2019.

We shall see.

In case you’ve forgotten, it’s been nearly 10 years since the bear claws have shown up on Wall Street. And, a bear market is defined as a fall of 20% from an index’s recent high.

Below are the weekly and 1-year index performance results for the four 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, Dec. 7, 2018.

DJIA -1.34% YTD big move down from the previous week’s 3.31%.

  • 1 yr. Rtn 0.73% way down from the previous week 5.22%

Most recent DJIA a new ALL-TIME CLOSING HIGH was reached on Oct.3, 2018 of 26,951.81. The previous high was reached on Sept. 21, 2018 of 26,796.16.

 

-S&P 500 -1.52% YTD a big move down from last week’s 3.24%

  • 1 yr. Rtn -0.15% way down from last week’s 4.25%

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 0.95% YTD big move down from last week’s 6.19%

  • 1yr Rtn 2.30% way down from last week’s 6.64%

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 average year-to-date total return for funds that fall under the heading of U.S. Diversified Equity Funds stood at -0.94% at the close of business on Thursday, December 6, 2018, according to Lipper. That’s down from the previous week’s figure of 0.68%.

Fund types with the worst y-t-d returns include  precious and basic metals funds.

For instance: Precious Metals Equity Funds, -21.65% for the year, on average; Basic Metals Funds, -17.92%; and Global Natural Resources Funds, -14.97%

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 Gas?

Diversifying your investment portfolio has always made sense. Case in point: Commodities.

According to Bespoke Investment Group, while silver, copper, coffee, platinum, oil, gold and corn are all down between -2.9% (corn) and 15.7% (silver), all commodity prices aren’t in the tank.

2018 winners, so far, include orange juice, up 5.4%, wheat, up 5.7% and natural gas, up 47.2%.

Yahoo for gas!

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POCKETBOOK Week Ending Dec. 1, 2018

 

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Based upon this chart, waiting for a Santa Claus rally this December could mean waiting till next year. (Source: CNBC.)

 

  • Trump’s  Hands

If you don’t think President Trump has a hand in how our markets are performing, better think again. Two simple examples: Not only has he put pressure on Fed Chairman Powell not to increase interest rates in spite of the fact that data shows suggesting a move up would be appropriate. And he  hasalso delayed his big time increases re raising China tariffs 25% until after the New Year, that is, for 90 days.

Each move could make Wall Street investors hap-hap-happier this holiday season. Then again, maybe not: While wages may have increased a bit for some,  credit card debt is  also on the rise. And, while the cost of a gallon of regular gas is cheap, groceries aren’t.

Additionally, as  far as  Santa ho-ho-hoing his way into town, climate change could muck up that sleigh ride.

Then there’s  Trump’s great big corporate tax cut —other than impacting mega corporations, it’s going to come back and bite many  of us one way or another.

To make that point, consider the following from the Treasury Department’s budget report  from a PBS New Hour report dated Oct.19, 2018:

-The 2018 budget deficit: $779 billion

-The budget deficit compared to 2017: + $113 billion

-Government revenue compared to 2017: +$14 billion

-Government spending compared to 2017: +$127 billion

I remember when one of the primary tenets of the GOP was to limit government spending and be fiscally responsible.

What ever happened to that?

 

  • Market Quick Glance

Up.

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, Nov. 30, 2018.

DJIA 3.31% YTD a big move up from the previous week’s return of -1.75%.

  • 1 yr Rtn 5.22% up from the previous week 3.23%

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 3.24% YTD a big move up from last week’s -1.54%

  • 1 yr. Rtn 4.25% way up from last week’s 1.37%

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 6.19% YTD jumping way up from last week’s 0.52%

  • 1yr Rtn 6.64% also a big jump up from last week’s 1.04%

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 -0.15% YTD up but still down from last week’s -3.05%

  • 1yr Rtn -0.70% still in minus-land from last week’s -1.85%

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

Two weeks ago, (11/15/18), the average total return for funds that fall under the U.S. Diversified Equity Funds heading was 0.68%, according to Lipper. On Thursday, Nov. 29, 2018, that average had increase a bit to 0.99%.

That figure happens to be way down from the 3.33% average return posted  three weeks ago on Nov. 18, 2018.

In an effort to put a positive spin on things—as in keeping fund investors thinking longer term rather that short term—2 years ago, (11/3/16-11/29/18) the average fund under this heading had a total return of 9.50%.

Then look back 3 and 5 years and the total return figure changes form 8.39% and 7.23% respectively.

East to see that clearly, things change.

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.

 

  • A New Year: A New Franchise Career

With a New Year right around the corner comes new opportunity for those with an eye to change and who want to be their own boss. One way to do that is by entering into a franchise agreement with an already established franchise brand.

I ran across this piece by Marco Carbaio, published in TheBalance.com, titled, “What’s the Best Franchise to Own?”

Here’s a quick directly-from-the-horses-mouth  look at a few of the picks from that piece that focused on the best 2017 franchises to own and selected by the pros at The Balance Small Business:

  • 7-Eleven Inc

This well-known brand can trace its origin back to 1927. In 2017, it had over 60,000 franchised location stores both within and outside the US. As a franchisee, the initial investment capital is as low as $37,200 and the highest is $1,635,200. The net worth requirement is between $100,000 and $250,000 while the liquid cash requirement  needed is between $50,000 and $150,000.

  • McDonald’s

McDonald’s has been franchised for the last 62 years and has over 30,000 locations. To get into this game prospective franchisees takes an initial franchising fee of $45,000 while the initial total investment capital is between $1,008,000 and $2,214,080. Also required is liquid cash of $500,000. Every year franchisees pay a 4 percent annual royalty fees on all the sales made.

  • The UPS Store

Founded in 1980. The UPS Store now has about 6,000 franchises.. The initial investment required to franchise is between $177,955 and $402,995. Your net worth requirement is $150,000 while the liquid cash requirement is $60,000. The initial franchising fee is $29,950 and the ongoing royalty fee is 5 percent.

  • Visiting Angels

The franchise fee for this home care franchise begins at $43,750. The royalty fees are 3.5 percent of the total revenues. If you make more money in terms of revenues, you get a discount and will then  pay 2.5 percent of the total revenues. You will also be involved in webinar teleconferences, annual conferences and trainings, being advertised online, TV ad over the radio and also receive home care leads on a monthly basis

The link for the piece is this: https://www.thebalancesmb.com/what-is-the-best-franchise-to-own-4150743

 

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