That Was The Week That Was- 1st Week December

 

 Overlap is good when describing a golf grip, not so when it’s about your investment portfolio. Investors have learned about diversification and asset allocation but have not considered ‘stock overlap’ as a danger to their investment plan. Overlap usually occurs in risky percentages when investing within one fund family and one stock shows up in substantial percentages in each of the individual mutual fund portfolios that make up their asset allocation. Mutual fund companies are able to gain significant cost advantage when they buy individual stocks and then parcel them out to their individual fund managers. It isn’t unusual, in the same mutual fund family, to see a domestic growth fund have many of the same issues included in a world growth fund and even an income fund. The dangers to stock overlap is when markets retreat and those same stocks lead the way. Not knowing that you own a significant share of the same individual stock in all your funds increases risk and volatility. The cure for stock overlap is a lot like getting rid of bed bugs- very difficult. Even mutual funds in several outside fund companies will have some measure of stock overlap. The key to investors is to minimize it but first run an analysis on your portfolio’s stock overlap to understand what you own and how much.  Then decide which funds are to be replaced with others of like minded philosophies. If you need help call me. You can get a more diversified, and less volatile, portfolio by reducing your stock overlap.

 Bad Bet For Companies in October.Corporations boosted their cash allocation in U.S. Treasuries last October, looking for investments that would weather the signs of weakness in the global economy. The move to Treasuries began in September, according to Rhet Hulbert, a senior portfolio manager at Clearwater Advisors. The shift turned out to be a bad bet, as significant economic strength, later in the month, boosted riskier asset classes.- source WSJ 11/25/2015 A lesson for retail investors who ‘think’ they can time the market/

 

 

 U.S. Durable Goods Orders Climb 3% in October. These are long lasting goods like refrigerators, cars, and things that are meant to last at least three years. Manufacturing is a small slice of the overall economy, reported the WSJ, but the category is closely watched for the signals it sends for broader demands. Drag from imports and exports should begin to wane as 2016 progresses, said HIS Global Insight Economist Michael Montgomery. ‘But it will be better like hitting one’s finger less frequently with a hammer, rather than happy days are here again.’ =source WSJ 11/ 25/2015 Economy/Economic Data.

The Commerce Department Reported The Week Before Last That Business Investment Across the U.S. Is One of The Worst Performances of the Six-Year Old Economic Expansion:

Orders for nondefense capital goods, excluding aircraft, declined 3.8% through the first 10 months of this year.

• A stronger dollar and falling commodity prices are sowing caution among a wide swath of companies.
• Industries are consolidating and eliminating excess capacity.Those industries range from retailers to energy firms.
• Business investment decline is far deeper than any experienced since the Depression. (2008-2009).
• A harsh winter put a kibosh on the pace of investment 2014-2015,
• Spending on mining and oil-field equipment fell 46% from a year earlier.

source WSJ 12/1/2015 Continuation will support a low-growth environment going forward.

 

Bob Doll,CFA Nuveen Asset Management Weekly Commentary 11/30/2015:

‘There are legitimate reasons for concern, but we expect the global economy to gradually improve over the coming year.’

 

MARKETS RESPOND NICELY TUESDAY

New Car sales boosted the markets Tuesday. DJIA +168, S&P 500 +22 and Naz +47. Healthcare & Tech were the leading sectors.

 

So when is oil going to hit rock bottom? According to CNBC 46% of analysts say first part of 2016.  Then 29% say it could be sooner. The fact that we are almost swimming in oil with the biggest surplus ever with 211 million barrels above 5-year average. U.S. domestic storage of oil is 189 million barrels ahead of last year. source CNBC & Criterion Research. 12/1/2015

 

If You Were Looking For That ‘Black Gold’ Rock Bottom Wednesday May Have Been It? The Saudi’s are bound and determined not to cut production and keep on pumping. Oil fell below $40 Wednesday on news of more glut and a continuing battle between producers in OPEC and the U.S., fighting for market share. The Saudi’s have attempted to ‘run’ the Americans out of the oil business but domestic drillers have instituted deep cost cuts and with support from banks, that have kept loans flowing, has helped the domestic industry weather the price collapse. The Dow fell 160 points chiefly on news of weaker global economies and the glut of oil. News that the Fed was on track to raise rates in December may have contributed to some of the action, as Ben Levisohn mulled in Barrons.com, even as others (Jeremy Hale at Citigroup) considered the stronger dollar to weigh on U.S. stocks in the near term. Sources WSJ, The Financial Times, CNBC and Barrons.com. 12/2/2015-12/3/2015

 A few things happened Thursday and one or both may have contributed to the Dow taking a nosedive down 250 points. One the Fed is almost assured of raising interest rates a tad this month, as Janet Yellen indicated the day before; and the other was  backlash from the ECB meeting where Mario Draghi suggested earlier in the year that December the bank would be doing something big. What he did fell short of what traders expected. And it failed to kindle any kind of confidence about the ECB’s ability to ‘re-anchor’ inflation expectations. We haven’t seen two bad days like this since September. Source Barrons.com and WSJ 12/3/2015

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

Securities offered through Westminster Financial Securities, Inc., Member FINRA/SIPC.

That Was The Week That Was- 4th Week November

 

 THE FED BELIEVES IN THE ECONOMY & THAT’S GOOD ENOUGH FOR INVESTORS! A rate hike in December means that the economy is showing enough strength to justify monetary tightening. After weeks (maybe months?) of flip-flopping, investors welcomed the news of a Fed Fund rate hike with a banner week for stocks that ended Friday November 20th. Looking into the crystal ball Raymond James chief investment strategist Jeffrey Saut said the market will be spurred on during the rest of 2015 by ‘performance anxiety’, that is, underperforming money managers trying to catch up and boost their annual return by buying during a traditional bullish season for equities. History shows, ‘It’s tough to put the equity market down in December.’ Source Barrons.com Vital Signs, The Trader, Vito Rancanelli, 11/21/2015 A hike will put to bed the concern that if the Fed doesn’t raise rates it must know something that investors do not know.

THE FED MINUTES GOT LESS ATTENTION THAN THE MARKET REACTION.

‘The minutes discuss the ‘real rate’-adjusting for inflation-equilibrium interest rate. The Target a ‘O’ percent equilibrium real fed funds rate conforms to what has been dubbed the New Neutral by Pimco to describe the big asset manager’s expectation that interest rates will remain lower for longer. That’s good news for financial assets, especially stocks. If bond yields remain historically low, equities allure is enhanced while corporations can continue to borrow cheaply to finance the return of cash to shareholders via stock repurchases and dividends’ Source Barrons.com Up & Down Wall Street, Randall W. Forsyth. 11/21/2015

ODDS & ENDS

 Rebalancing a Portfolio Simply Means to Keep What You Currently Own in the Original Allocation. Financial professionals suggest that you rebalance your investments at least once a year. There are ‘automatic’ programs, through some fee-only or insurance plans, that do this quarterly or semi-annually. A good many ‘old’ financial experts don’t give much thought to rebalancing. Some of the more modern financial resource firms ,such as Morningstar, think rebalancing is essential. The easiest way to rebalance is to sell winners and buy more of the losers.If you started with 60% in equities and 40% in bonds and at the end of the year you have 62% in equities you’ll sell the 2% and buy more bonds. That doesn’t sound like you’re moving much around but ‘experts’ contend that by doing this you’re preventing a catastrophic event somewhere down the road. Old Value Investors say no and that you should sell losers and keep your winners. What works for you? Most all of us would be comfortable keeping our portfolio in the same relative Risk range than worrying about rebalancing. You do this by simply checking the Beta numbers of your investments and making sure they stay within your comfort level. Beta can be found in all investment material or call me for questions.

 

The Difference Between Growth Funds Versus Value Funds. The Value model looks for large companies with above average cash flows and high dividend yields. Growth stocks look for companies that have increased earnings per share in each year for the past 5 years, and which have a 12- month relative strengths above 70. Most all mutual funds have a combination of both in their mix. It is not unusual to see a Growth stock become a Value stock. There are also companies that ‘confuse’ investors and have characteristics of both Growth & Value. source The Globe and Mail the globeandmail.com 11/20/2015

 

 7 Things You Should Know Before The Fed Hikes Interest Rates:

• Check out mortgages. Now is the time to act.
• Watch for rising Home Equity Lines of Credit that have Variable rates linked to the prime.
• Refinance credit cards before the hike
• Savings accounts and other guaranteed accounts move in lock step with Fed Funds rate.
• Consider a car loan before rates increase.
• Student loans are not affected.
• Stocks and bonds could take a hit.

Source Bankrate.com Michael Giusti. 11/20/2015

 

The average man in 1960 weighed 166.3 pounds and today weighs 195.5 pounds. The average turkey has also gotten larger.

 

Robert C. Doll, CFA, Nuveen Asset Management Weekly Commentary November 25, 2015.

• Lower energy prices have historically led to periods of improved economic growth.
• Rising inflation may become an important story in 2016.
• The Paris attack could act as a drag to European growth- specifically trade, travel and consumption.

FLAT IS THE NEW UP!

GOLDMAN SACHS ANALYST PREDICTS 2016 AS A FLAT MARKET.A sobering economic forecast of 2.4% growth versus a previous estimate of 2.8%. On the business side corporate earnings are expected to rise in 2016, says RBC Wealth Management analyst Kelly Bogdanov. ‘We’re not seeing any significant recession risks cropping up now. Employment is solid, the service sector continues to be quite strong, personal income is growing and consumer spending looks good.’ source CBS News. cbsnews.com 11/24/2015

Dividend Investors May Want to Start Investigating Higher Yield Stocks especially those with a consistent track record and long-term strong overall management and shareholder returns. Look for companies that have a history of raising their dividends. The sectors that these higher yielding stocks fit are in the REIT and Oil & Gas Pipeline sectors, for the most part.Call me at 586 295 0430.

WHAT’S IT TAKE FOR THE MARKETS TO REACH NEW HIGHS? BlackRocks’s Russ Koesterich told CNBC’s Future’s Now panel that the S&P 500 Index will continue to trade in sideways and choppy pattern until there is ‘significant evidence of growth; in both the economy and earnings picture. In other words, using the words of Jim Carville, ‘It’s the economy, stupid.’ source CNBC 11/25/2015

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

Securities offered through Westminster Financial Securities, Inc. Member FINRA/SIPC.

That Was The Week That Was-3rd Week November

 

 

NO GLOBAL MARKET RETREAT MONDAY AFTER PARIS TERRORIST ATTACKS. U.S. STOCKS UP, LED BY ENERGY SECTOR. DOW UP 238 POINTS. BEST WEEK IN NEARLY THREE WEEKS. source wsj 11/17/2015

 

 In his new 10-year model Jack Bogle, former Vanguard founder and indexing guru, expects stocks to return on average 6% and bonds 3% over the next decade. The 6% estimate, according to Bogle, is not conservative. Looking back at 2015 we can already assume a negative year for the Dow and the S&P 500 Index. Bogle’ model of 6% and 3% doesn’t touch on inflation but even with current and future inflation expectations the 6% real return in stocks would be acceptable. Morningstar reported that pension funds are in trouble. The expected median return assumption for pension funds in 2015 was 7.68%. Morningstar reported the obvious and that pension funds were in real trouble and wouldn’t come close to their expected returns.  SOURCE MORNINGSTAR.COM NEWS 11/13/2015

Whisper: If stocks return 6% and inflation hits 2% plus taxes at 30% real net gains fall to around 2%. Bonds would be in negative territory.

Stocks Hammered Friday 13th November. Carry-over? Retail and energy weight along with a strong dollar pulling indices into negative territory for the year.

 Every time the Fed edges closer to raising (tightening) rates the markets squawk like a spoiled child. The shorts come out in vengeance and the Fed placates the markets with another- kick the can- we’ll do it later proposal. Ben Levisohn at Barrons wrote that there have been 7 tightening cycles since 1982 and the S&P 500 Index has exhibited a meaningful pullback or correction each time. The strange thing is that stocks have performed extremely well during prior tightening averaging a 20% return. Source Barrons.com 11/14/2015 Stocks to Watch.

 

GETTING PAID.

Since 1956 one-third of the S&P 500’s total return has come from dividends, according to S&P Dow Jones Indices. Dividends in 2015 on track for a record year. It’s important for investors to focus on companies with growing dividends, said David Kostin, chief U.S. equity strategist at Goldman Sachs. Some sectors, looking ahead, will offer better dividend growth than others, Goldman expects the financials and information technology companies to lead the way. Barrons.com 11/15/2015 Speaking of Dividends.

Stocks Ended Their Session Tuesday Mixed After a Huge Early Run. Oil and Geopolitics were the main culprits.

Wall Street Up Significantly On Fed Minutes Thursday November 18th. The Street bets a Fed increase in December is almost a sure thing. The WSJ reported that the Fed could spook financial markets if officials decide to hold steady in December, said Mark Cabana, U.S.rates strategist at Bank of America Merrill Lynch in New York. ‘Investors would wonder: What did the Fed know that I don’t?’ Expectations for higher rates are driving investment flows into U.S. assets, pushing up short-term bond yields in the U.S. and reigniting a rally in the dollar. The Dow closed up 247 points, the S&P +33 and the Naz +89. Source WSJ & Google Finance 11/18-19/2015

 

The Westminster Financial Home Office moved Friday to Be in Their New Space Monday Phone for Contact Will Remain the Same & New Address will be 40 N Main Street, Suite 2400, Dayton, Ohio. Notification will be sent to all clients.

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

SECURITIES OFFERED THROUGH WESTMINSTER FINANCIAL SECURITIES, INC. MEMBER FINRA/SIPC

That Was The Week That Was- 2nd Week November

 

A Blow-Out Jobs Report  Friday the 6th (Almost Guarantees a Rate Hike in December.) It was an ‘In-Your-Face’ number for all the economic naysayers and gloomy Gus’s (And especially to the guy who called me a month ago and told me a bad thing was going to happen to the economy and stock market in three weeks and he heard it from a Rabbi has never been wrong…), the jobs report officially tagged 5% as the unemployment number (I am not going to participate in the political argument if 5% means 10%), it’s close enough to full employment and our economy on the move. Experts (CNBC) shouting in one voice after the close Friday that financials are the sector to be in as higher interest rates benefits those that have the highest number of depositors. And on the eve of the eve of 2016 I like what’s happening with the economy (if I close my eyes to Washington politics, terrorism, globalism and the coming election). Higher wages (2 1/2% increase this past year), low interest rates (the Fed hike still makes rates far less than where they were during the Civil War for crying out loud), low energy costs (another pay boost for the average worker), makes spending more money by the U.S. consumer almost a sure thing. And as the world knows, the American consumer is able to uplift the world economies with their spending. Now if the dollar would ease, oil edge up a tad and the national election in the rear-view mirror things would be very nice indeed. sources cnbc 11/6/2015

 Adam Grimes, CIO @ Waverly Advisors said, ‘…despite recent troubles and increased volatility, investors are given a good opportunity to buy U.S. large-cap stocks.’ For years the technical analyst has been saying, ‘Be long stocks,’ and the reality is that is what the market has been saying.’He noted that investors seeing the increase in volatility need to avoid being scared out of stocks by what he described as ‘silly technical,’ measures that show market activity, but don’t reflect an edge when it comes to delivering market insight. The markets could continue another three, five years and another 100%. Everything we look at shows an intact uptrend. Source MarketWatch.com 11/7/2015 Chuck Jaffe

 

Strolling down memory lane… A while back I wrote about a former client that for the better part of a decade I baby-sat, hand-held and did everything but make the kitschy-coo noises and chuck him under the chin to placate him every time he got a bug to sell all the funds he owned because some ‘radio’ weirdo-financial doomster predicted the end of the world, or he read a headline he didn't like. One day he ups and leaves me for a more accommodating ‘expert’, who’s happy to take the guy’s money and run him in and out of the markets every time the guy gets the whim until the wallet’s run dry. The former client was at least polite enough to call and tell me of his decision, ‘I’m going in a different direction.’ Well, the only direction he’s going is to the poor house, and anyone who is in a similar situation and tries to time the market is on the same freight train. Interestingly most amateur investors have finally caught on that market timing is bad for one’s financial health. Fidelity reviewed their 401k clients and discovered that this past summer only 4.9% of them made changes to their 401k. Jeanne Thompson, vice-president at Fidelity Investments said, ‘People are starting to get the message. During volatility, many times the best course of action is none at all.’ source cnbc.com 11/6/2015

 When Economists Talk About Financial Conditions They Are Talking About These Four Things:

• The US Dollar
• Corporate Bond Spreads
• Equity Market Levels
• The Level of Interest Rates At Different Maturities. Source Business Insider 11/7/2015

source USA TODAY

Stocks Fall Triple Digits Monday on Rate Fears & Investors Adjust Their Portfolios. DJIA –180.Energy and Cyclical Consumer Goods were the biggest losers.

 

These are Holiday Cups from Starbucks. Some folk squawked that last year the cups were too Christmasy and non-inclusive. This year the other side said the company caved with their red cups and they want more of a Christian Holiday Spirit.

 

The Chinese Consumer is Lifting China’s Consumer Stocks.

China’s retail sales in October are brightening the view that consumers can help offset a slowdown in the world’s # 2 economy. That strength contrasts with the performance in traditional growth areas like manufacturing and infrastructure. WSJ 11/11/2015

Rotation or Trading? Markets slightly down-again- Wednesday and the excuse du jour was poor retail outlook. On Tuesday it was the rate hike. Mixed sector performance for the week to date. It appears what went up one day was down the next and vice versa. source Google finance. 11/12/2015

REMINDER REQUIRED MINIMUM DISTRIBUTION BEFORE YEAR-END. I have forms in the mail to all those that need to take their distribution. Make sure you choose withholding, sign and date. Qs, call or email me.

Happy Holidays May Not Be For Retailers. Stocks swooned Thursday as the DJIA lost 250+ points and oil fell hard. This on another major retailer giving bad news. That’s two in two day and both Macy’s and Nordstrom’s have been punished soundly. But, as Jim Cramer wondered on his Mad Money show, lower oil prices should have loosened consumer’s wallets but apparently it hasn’t. What’s even more worrisome the Jimster pondered is that 85% of the companies in the S&P 500 Index are inversely correlated to the price of oil. Meaning that when oil goes down they go up. It seems that lower oil prices are both bad for stocks and the real world. There’s no answer just a lot of questions. The assumption that ‘short-sellers’ are deep in the oil companies but that doesn’t explain where consumers have gone. SOURCE CNBC, MAD MONEY, WSJ 11/12/2015

QUESTIONS CALL PAUL @ 586 295 0430 OR WRITE HIM @ pstanley@westminsterfinancial.com. SHARE THIS BLOG WTH SOMEONE WHO CARES ABOUT THEIR MONEY.

SECURITIES OFFERED THROUGH WESTMINSTER FINANCIAL SECURITIES, INC. MEMBER FINRA/SIPC.

That Was The Week That Was- 1st Week November

 

 

October is traditionally a scary month for investors. Not in 2015. BEST MONTH (NOT JUST OCTOBER) IN FOUR YEARS. The DJIA closed + 8.47% for the month, Naz +9.38% and the S&P 500 +8.30%. Investors were cheered by corporate earnings, especially in two of the largest energy companies. Oil also ended up 3.3% for the month. Still there is concern going forward as banks stalled at the end of October. Sources CNBC.COM and Barrons.com Stocks to Watch.

  WHAT’S IN THAT MUTUAL FUND YOU OWN THAT YOU CAN’T BUY ON THE PUBLIC MARKET? If you own mutual fund shares in BlackRock, Inc., Fidelity Investments, Hartford Financial Services Group, Inc., or any one of a dozen or more other public mutual funds you may own an investment in a non-public start-up without knowing it. The problem is that since these are non-public shares the mutual fund companies have no clue on how to realistically value those shares. One company may have one price and another company a totally different one. The following charts illustrate how far off the various companies are. 

According to the WSJ T.Rowe Price values shares in one software startup at double the value that other funds had the price pegged.Katie Reichart, senior analyst at Morningstar, said that valuations of private companies are ‘pretty opaque.’ The worry is that the valuations are completely unattached to any real history.

Still investors shouldn’t be concerned since regulators limit the amount that funds may invest in these non-public startups. Funds typically own no more than a tiny percentage of their portfolio in startup stocks. Still, if you’re looking to buy Uber before the IPO you probably have a bit in your current mutual fund. SOURCE WSJ 10/30/2015

Sector Losers Year-to-Date: Numbers received from JP Morgan provided some insight to S&P 500 Sector Returns through October 30, 2015. Not surprisingly the biggest loser was energy followed by materials and utilities. The big winner this year was Consumer Discretionary followed by Technology and Health Care. SOURCE JP MORGAN WEEKLY MARKET RECAP NOVEMBER 2 2015.

The utility and technology sectors stalled as the DJIA opened with a bang Monday the first trading day of November and closed up triple digits on the DJIA.  source google financial.com

 

Bob Doll, CFA @ Nuveen Asset Management- November 2, 2015 Weekly Commentary:

• 3rd Q GDP Growth Mixed but Critical Areas Showed Strength: (1) domestic demand (2) consumer spending (3) residential investment.
• Holiday spending should be strong.
• The Budget deal contributing to economic growth and stability.
• Earnings accelerating except for the energy sector.
• Global Growth Should Strengthen Next Year, Lifting Equities.

ART CASHIN @ CNBC said, ‘When October is up over 7% the result of the next two months- the so called Santa Claus rally- is cut in half.’ Expect not the usual 3% to 3 1/2% but 1.5% for the next 2 months. CNBC 11/2/2015

Markets Up- Tuesday.

BUSINESS INSIDER REPORTED WE MAY BE SEEING BUSINESSES REVISTING THE 1960s. IT’S MERGER MANIA! Getting big just for the sake of big! Roger Altman on CNBC said, last Monday, that companies were being big for the sheer sake of it. Too many CEOs are thinking bigger is better. He thinks things have gone too far.

BI reported, ‘The merger mania business was boom and bust back in the 1960s. It was fueled by low interest rates, aggressive CEOs and investors (sure, blame us), hungry for earnings growth.’  Business Insider 11/3/2015. No one provided a remedy or specific warning in the report but simply stated what we all know is happening when you have cheap money and a desire to pump up share price.

 

Christmas Came Early For Retirees in The New Budget Deal Richard Johnson, a senior fellow at the Urban Institute said, ‘It’s an unexpected bit of sanity coming out of Washington.’

• Shoring up of Social Security disability insurance. Beneficiaries were facing a 20% cut.
• Curb Medicare Part B premium hikes. Social security payments will not increase next year so net income would be lower if the hikes went through. source cnbc.com 11/4/2015

Markets lower Wednesday & Thursday.

BULL MARKET ALIVE AND WELL IF MOVING AVERAGES HAVE ANYTHING TO SAY.  More than 80% of the stocks on the S&P 500 Index are trading above their 50-day moving averages. The index itself is trading above the 50-day. It hasn’t done that since February 2012. Trading above a moving average indicates future strength. MarketWatch.com  11/4/2015

Holiday Season for Retailers Should be Robust as Shoppers Plan to Spend More in 2015. source WSJ 11/6/2015

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

Securities Offered Through Westminster Financial Securities, Inc. MEMBER FINRA/SIPC.

That Was The Week That Was- 5th Week October

 

THE BEST 6 MONTHS FOR STOCKS IS ABOUT TO BEGIN. It’s the Halloween indicator. When the stock market is riding a wave of momentum, as it is now, that’s good news. The Halloween indicator is a seasonal tendency, according to Mark Hulbert at MarketWatch, to produce the best results between Halloween and May Day (Also called the winter months).

This year could even be stronger. The results have been that whenever the market was a loser over the two months prior to Halloween, the Dow produced an average Halloween through May gain of 4.0%. This seasonal tendency has been stronger the last 15 years. MARKETWATCH 10/23/2015

 

 

You Be A Saver or An Investor? There is an argument floating about that believes savers are anyone who turns their money over to another entity or person to invest for them. In other words- savers are people that relinquish control over where precisely their money is invested. A mutual fund, for example, is a saver’s vehicle since the fund managers make the investment decisions. An investor, on the other hand, is someone who makes specific decisions on what to buy and when. I don’t believe that. If you’re invested in the marketplace, be it bonds, stocks, mutual funds, ETFs, you are an investor. If you save money in guaranteed only dollars you are a saver. The difference is the comfort level of the investor. A saver doesn’t worry about the upside return, but loss of principal. An investor understands markets move sometimes irrationally. There are ups and downs but rewards, over time, that exceed that of guaranteed dollars. Understand what kind of a person you are with money and you’ll be a lot happier for it.

 

Bob C. Doll, CFA, Nuveen Asset Management Weekly Commentary:

• The US consumer remains relatively strong, and should be an important driver of economic growth.
• The economy may be slowed in the 3rd quarter but should rebound.
• China engaged in another interest rate cut in an attempt to stimulate.
• Corporate earnings are beating expectations but may post another quarterly decline. SOURCE WEEKLY INVESTMENT COMMENTARY 10/26/2015.

 

A New Survey from Blackrock found that Americans are holding nearly twice as much cash as they think they ought to in order to reach their retirement goals. People ages 55-64 said they expected to have about $45000 in annual income at retirement. The amount they have saved would only provide an estimated $9,129. A gap of $36,371. Even those affluent earners who earn $250,000+ hadn’t set aside enough . WSJ.COM 10/27/2015 I wonder if they calculated social security into the total desired? There still would be a gap but not as large. In addition, using both principal and interest the income could increase but eventually run out.

TUESDAY DOW TRANSPORTS TOOK A BEATING. FALLING 2.8%. DOW INDUSTRIALS OFF A JUST 0.3%.

CHART SOURCE FACTSET/ MARKETWATCH.COM 10/27/2015

 

You Had to Be There to Believe It. Wednesday’s markets were up triple digits on the DJIA when the Fed announced no hike for October and the markets promptly sank only to bounce right back and close +198 points on the Dow, +65 Naz and +24 on the S&P 500. The Fed did give a hint that they could provide a rate hike in December. Source Barrons.com 10/28/2015

 

2016 BEARISH SIGNAL?

HISTORICAL DATE SUGGESTS MARKETS NOT KIND TO TWO-TERM PRESIDENT’S IN LAST YEAR IN OFFICE.

Hulbert Financial Digest, Source Chart.Barrons.com 10/28/2015.

 

ECONOMY STRONGER THAN Q3 GDP GAIN

According to the Commerce Department the economy expanded at a lackluster 1.5% annual pace. But, the overall number, according to IBD, masked evidence of sturdy demand.

• Consumer spending +3.2%
• Auto Sales +6.7%
• Exports advanced at a 1.9% down from 5.1% in Q2, even with the dollar’s appreciation.

Factors that contributed to the latest numbers were a move to reduce excess inventories and the adjustment in the energy sector. Domestic demand helped offset the drag from inventories; which subtracted 1.44% from the GDP, the biggest such move since the end of 2012. ‘This was a really good report,’ wrote Joel Naroff of Naroff Economic Advisors. Jennifer Lee, chief economist for BMO Capital Markets,’The report shows that underlying growth is still strong.’ Source IBD 10/30/2015.

 

QUESTIONS, CALL PAUL @ 586 295 0430 or WRITE HIM @ pstanley@westminsterfinancial.com. SHARE THIS BLOG WITH SOMEONE WHO CARES ABOUT THEIR MONEY.

SECURITIES OFFERED THROUGH WESTMINSTER FINANCIAL SECURITIES, INC. MEMBER FINRA/SIPC.