That Was The Week That Was-5th Week May

 I read something last week( 5/21) and got the giggles. Paul Merriman writing in MarketWatch.com reported that one of the biggest financial myths is that investors think its hard to beat the S&P 500 Index. Not at all, disagrees Merriman. “It would be if you were using only individual stocks. It isn’t that tough to beat the index.” And then he explains if you diversify widely in a mix of large, small, growth, value, domestic and foreign funds you will most likely beat the S&P. “Although that won’t happen every year…,” he warned. So I gotta ask, if it’s so easy to beat the index but I can only do it every so often how does that dispel the myth? And what exactly is the recipe? Isn’t that like a stopped clock is right twice a day? Sometimes people should read what they write. In the real world and in most cases financial professionals are creating portfolios with less risk than the market index but with competitive returns.

First Time Home Buyers are contributing to the lack of a housing recovery. We expected a housing boost in 2014 but first time home buyers are being shut out by higher standards, high prices and a ‘sluggish’ economy (WSJ/5/22). And the other question is what about Fannie and Freddy? Will they be reorganized or phased out? First time home buyers now account for 16% of the market- down from a historical 29% in new home sales.

Jackpot! S&P 500 Index Hits Record Tuesday. Large Cap Value stock shares up 4.42 through May 23rd, courtesy of Lord Abbett newsletter. Small cap Growth –(minius) 4.40 over same period. 

GAO (Government Accountability Office) reports most people claim social security too soon. Waiting a year may increase income benefits by 6% says the GAO. Among those born in 1946 only 8% of the men and 6% of the women delayed claiming until age 67.

Markets took a Breather Wednesday. We may be having one of those so-so years after a huge 2013. But  I’m also thinking is that this market can keep rolling on as earnings increase, manufacturing grows, home buying slowly improves (and the government doesn’t throw in a monkey wrench on borrowing). Thursday markets up. Down Friday.

Bull Markets Last Longer Than People Think. I got the following chart from MarketWatch.com that got it from Morningstar.  It shows the length of Bull markets and the relatively short Bear Markets in between.

chart created by Morningstar.

Questions call Paul @ 586 295 0430 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.

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