After months of denial, efforts to contain, and more recently the widespread (and largely followed) directive to maximize social distancing, it appears that some progress is being made to slow the devastation caused by the coronavirus. The availability of tests has increased, the rate of new infection has slowed, and . . .
More than a few times over the last few years, I have commented on the looming possibility of daily changes in the market averages well above the relatively mundane moves of 100 to 200 points that have become commonplace. What we had been used to was . . .
Quite frequently, I have been asked for my thoughts on the markets and other things so here they are. This is not meant to be the script to the future, but instead some food for thought for those looking for perspective.
The combination of exceptional investment returns registered last year and rising heat in the geopolitical arena suggests that this year will see an increase in day-to-day price volatility. Although seasonal volatility tends to increase during late summer and early autumn, it seems likely that . . .
As has often been the case after the market has turned in an unusually broad advance, the gurus of Wall Street continue to build their cases for more of the same. This most certainly is a replay of a recent film entitled Dumb and Dumber.
As we wind down what will soon be the old year and complete our plans for the holidays, it’s always a good idea to take stock of where we’ve been and what we have to look forward to. 2019 has been an interesting year, especially so for the financial markets, which have provided returns far in excess of . . .
Over the years, October has often been a period when the stock market tended toward unusual volatility. The biggest drop of the past half century, 22%, took place back in October, 1987, and more than a few of those early fall months have seen substantial movements in both directions. Indeed, only a year ago . . .
When I was younger–much younger–I remember folks with stocking stuffers and presents under a tree. For some kids, the stocking stuffers included a passbook savings account, with a $100 gift from Santa. Wise parents, for sure. Besides offering a great lesson on savings, those parents provided a simple explanation of bank savings accounts and monthly interest. In those days, FDIC-insured savings accounts earned 5%.
It seems like only yesterday that Neil Armstrong and Buzz Aldrin set foot on the moon, but yesterday really was a half century ago. Since then, this country’s pace of space exploration has slowed dramatically. Over the same period, the rate of progress on Wall Street has taken off.
Last month I said, “Investors remain optimistic that U.S. and Chinese trade negotiators will come to terms on an ever-elusive trade agreement.” Unfortunately, “ever-elusive” continues to be the operative word.
Since early May, there has been an ongoing issue of tariffs, first with the Chinese, then with Mexico.
We all want what is best for our children. At an early age, we teach them to eat the right foods; we place them in the best preschools; we encourage them in grade school and high school; and we cheer them on when they excel in extracurricular activities.
Put another way, we want our children to succeed in all aspects of life.
Henry Wadsworth Longfellow’s poem, “The Midnight Ride of Paul Revere,” retells the story of a patriot who shouts a harrowing warning to his fellow colonists: “A recession is coming! A recession is coming!”
The U.S. economy exhibited strong growth in the second and third quarter, a recession did not ensue, and yes, 2017’s lack of volatility was remarkable. We knew it wouldn’t last, but predicting an expected exit date is difficult.
January began 2018 on a firm footing, building on highs in the wake of tax reform, low interest rates, low inflation, and strong corporate profit growth. If stocks rise or fall on the fundamentals . . .
The market pyrotechnics of the last few months have as usual unsettled more than a few Wall Street watchers. This is no surprise, though it really does not make any sense.
For one thing, ups and downs in stock prices are a regular happenstance. Prices rise and prices fall, but the long-term path of least resistance is up. What’s more, in almost every year, there is . . .
Now that triple-digit daily changes in the major leading market averages are more common than not, one has to wonder if this apparent volatility is a significant change in the overall scenario or whether this is nothing more than . . .
With only a few weeks to go before Christmas, it’s time to take a look at where we’ve been this year and what might lie ahead. Unlike 2017, at least from an investment perspective, things have changed dramatically.
The fact that stocks have been retreating for the last week or so should come as no surprise. For one thing, the sugar high produced by the tax-cut related earnings gains seems to be wearing off. As this takes place, more experienced investors are realizing that . . .
In the wake of the nonstop market advance of 2017, price action during the current year has been relatively restrained. Last year’s net result was a hefty double-digit advance with nary a significant pullback along the way. With the exception of the opening weeks of the current year, which seemed to suggest . . .
As we move through what in the past has traditionally been the most difficult time of the year for the stock market, we need to take a hard look at where things stand and what’s likely to be in store over the next few quarters.
The 60 days following Labor Day have traditionally been among the most difficult of times for the stock market. Indeed, October has been Ground Zero for the biggest market drops of the last 100 years. Yet, despite the fact that . . .
The latest news from courtrooms in New York and the D.C. area comes at a time when the stock market seems to be on a path to new highs. These days of late summer are typically when folks used to take a breather and disconnect from whatever is making headlines in the media.
Part of the process of evaluating the underpinnings of stocks is the information companies report during what’s known as earnings season. For companies reporting their quarterly results on a calendar-year basis (most do), there are four key reporting periods: late January/early February; late April/early May; late July/early August; and late October/early November. These are known as the earnings seasons.
As we work our way through midsummer, it seems as if the news cycle has accelerated to warp speed. That’s hardly the kind of backdrop for what we usually think of as the time to relax. News of tariffs and trade wars is most certainly unsettling, especially in view of the prospect of higher costs and the likelihood of more restrained spending. These kinds of things, if taken to a higher degree, can lead to . . .
In past years, summer brought with it a time to turn one’s thoughts to more blissful endeavors. Although childhood may have been many years ago, what lingers is the apparent freedom from care we felt when at last we were done with school. Much has changed since those halcyon days when time hardly seemed to move. Back then, the days went by slowly and . . .
Given the acceleration of important developments in the U.S. and abroad, it’s no wonder that investors have been girding themselves against the impact of nonstop breaking news. Although over time the stock market is primarily a reflection of changes in underlying fundamentals, day-to-day price action tends to be . . .
These days, it has become increasingly difficult to disconnect and turn aside from the nonstop barrage of news, some of which is exceedingly unpleasant. What’s more, the level of business uncertainty has risen, a happenstance that never sits well with Wall Street. That’s not a good sign for . . .
Not that long ago, the media often had to scratch around for developments that might hold the interest of its audience. Days and weeks would go by and from time to time we’d tune in to find out what was going on throughout this country and abroad.
That was then and this is now. Fast forward to the present and there seems to be . . .
One of the truisms in investing is that periods of unusually broad gains are followed by years when more moderate increases are likely. Most of us recall less than fondly that the decade from 2000-2010 was a span when market prices went nowhere, albeit with a fair amount of volatility along the way. The decade included the debacle of 2001-2002 as well as that of 2008-2009.
Yes, you can. Although the gains for the S&P 500 over many decades past have averaged about 10%, that includes gains and losses in some years that are a multiple of that rate. So a target of about 10% would be . . .
Although we’re well into the first-quarter earnings season, Wall Street seems more bored than not with the latest news. Corporate profits overall are coming in ahead of estimates, but stock prices continue in the broadly fluctuating range that began in early February.
For years, the Wall Street community has had a field day offering the promise of a bright future while keeping largely mum about the kinds of profits it reaps from selling its broad array of great opportunities. Those who have seen the movie, The Wolf of Wall Street, got a glimpse of . . .
In the wake of nearly a year and a half of exceptionally stable and strong stock market activity, the beginning of February saw an unleashing of daily price movements not unlike what you would have expected from . . .
Now that typical daily market moves are in the hundreds of points on the Dow Jones Average, it will be helpful (and perhaps calming) to learn how today’s gyrations compare with those of the past. As we review historical data, we will learn . . .
Regression to the Mean is a term that’s regularly used by folks who refer to the tendency of various types of activity to return to what had historically been the normal range. What we witnessed in 2017 was . . .
In the wake of the almost soporific market advance of 2017, more than a few investors have deluded themselves into thinking that this course is the new normal. Surprise, surprise. It most definitely is not.
These days, it seems as if triple-digit market moves are the new norm. Although it was only a few short weeks ago when the media trumpeted news of the single biggest point drop in market history. All of which amounts to so much rubbish since . . .
It’s times like these when most investors are wondering what’s going on and what to make of it. As most of us are well aware, when attempting to explain the latest developments, the seers on Wall Street are often tempted to use terms that are either vacuous, silly or just plain pretentious. So here goes my effort to . . .
Much like pullbacks of the past, the market turmoil we’re now seeing is a dramatic break from the seemingly nonstop advance of the latest five quarters. Indeed, the steadiness and almost dependable gains enjoyed on most recent days were certainly enough to . . .
After more than a year of unprecedented stability and gains after which valuations ended up at levels that could only be described as priced for perfection, investors have finally awakened to the reality that . . .
It’s safe to say that the U.S. economy has more than enough momentum to stay on a roll straight through the year. The prospect of reduced corporate taxes raises the probability even higher. Yet, as we all know . . .
One of the well-known Wall Street tales is that whatever happens in January is likely to be a good indication of how the rest of the year will be. In the interest of getting a better understanding of the probabilities, I studied the returns of the Standard & Poor’s 500 for the last 50 years. The results of that study . . .
In the wake of the unusual market performance of 2017, one can be certain that what lies ahead will not be more of the same. For one thing, the most recent 12 months was exceptional both in terms of . . .
The current year has been most unusual from an investment perspective. Whether it’s viewed as a Goldilocks environment or a confluence of favorable factors, stock market advances, both in the U.S. and abroad, have been well above average. Even more interesting, however, is . . .
The current year has been one of unusual calm in the investment markets. Now that we’re almost halfway through December, it has been a period of minimal market fluctuation along with well above average upward progress. The latter is largely . . .
As the day of decision on the future of U.S. taxes draws near, it seems appropriate to give further thought to its potential impact on business and individual taxpayers. Behind all the hoopla surrounding this legislation, the probability is . . .
One can only marvel at the nonstop advance of the leading market averages. It’s almost as if the law of stock market gravity has been repealed. Triple-digit stock price quotes abound and it seems . . .
Pay your credit card balance in full each month. If you don’t pay your balance in full each month, you will be paying steep interest rates on the balance. that interest rate could easily be 15% to 20% or more annually. Call the credit card company and tell them . . .
Now that it has become clear that the ongoing efforts to repeal and replace the Affordable Care Act have come to naught, Congress is about to tackle what has been billed as a massive revision of the tax code. The last major rewrite of IRS regulations was some three decades back, so it seems like . . .
Although asset allocation and diversification are words that are regularly used when thinking about proper portfolio construction, more often than not lip service is not followed by actual attention to the process of putting together a grouping of securities that makes sense. What makes sense is . . .
So far this year, the major market averages have almost completely ignored the possibility that stock prices can actually move lower. Volatility for the year is among the lowest in a long time and short-term pullbacks of any consequence have been nonexistent. For investors, it seems . . .
Wall Street research can be extraordinarily useful in helping to gain a better understanding of the inner workings of companies. Having been on the research side of the investment world for many years, I’ve had extensive experience in . . .
Don’t Be Burned By Hot Stocks (and How To Find Good Ones)
Earlier this summer, I got a call from a fellow whose portfolio had lost almost one third in less than two months while the market was moving steadily higher. When I asked how this happened, he said . . .
Why You Should Be Concerned About High Stock Prices
Since early March, stocks have been trading in a relatively narrow range. Although the media has been making a big deal about the new highs for the Dow Jones average, that index has gained little more than . . .
After more than eight years of recovery from the Great Recession of 2008-9, it seems increasingly unlikely that the U.S. economy will continue to expand without a temporary pullback. Although the current expansion . . .
Looking For Current Income? Here Are Some Possibilities.
For investors seeking worthwhile current income, especially older folks depending on fixed-income investments, the past decade has been a time of slim pickin’s. Although it’s likely that interest rates will continue to rise over the next few years . . .
Over the years, most of the financial planning work I’ve done has been with couples in their pre-retirement years. As the time for retirement draws closer, it’s no surprise that people in their 50s and 60s spend more time thinking about whether they have prepared adequately for life in their later years. But more recently . . .
Here’s Why Health Care and Technology Should Be In Most Portfolios
Although it’s well known that the odds are against us when trying to do better than the S&P 500, there remains the temptation to be among those who have actually succeeded. Since stock prices over time reflect changes in underlying earnings, it should be rather obvious that . . .
Numerous stock selection strategies have been tried; few have stood the test of time. Focusing on high growth and above average price momentum is a strategy that works well during periods of market strength, but it’s a double-edged sword. That’s because . . .
One of the basic rules for investment advisers is to know your client. In theory, the reason for that rule is to ensure that the adviser is providing appropriate advice to the client. But it’s equally important for . . .
Two of the questions I hear regularly are “When to buy?” and “When to sell? Those kinds of inquiries suggest that there’s an absolute level at which a security is worth adding to one’s portfolio as well as a price when it’s time to say adios. It would be nice to think . . .
Although it seems as if the stock market can only go higher, that kind of thinking often leads to trouble. After an eight-year rally from the depths of early 2009, the leading averages continue to climb into new high territory, apparently in expectation of a substantial upturn in underlying corporate profitability. Whether that’s a reasonable possibility or fantasy is . . .