Stock Market Investing
Nothing Seems to Scare Investors These Days
The market has been going up and many stocks seem overpriced. Then back to back hurricanes hit Texas and Florida as the crazy dictator in North Korea develops nuclear weapons and threatens his neighbors. One might expect one of more of these issues to be the straw that breaks the camel’s back and sends the market into correction. But nothing seems to scare investors these days. The Guardian notes that markets hit record highs after short lived concern about hurricanes and nukes. All of the details of damage from storms and potential war on the Korean peninsula do not seem […]
Do Technical Signs Predict a Crash?
The stock market keeps going up despite what would appear to be overpriced stocks. But eventually every rally ends, sometimes with bang and sometimes with a whimper. Market Watch writes that a technical flag indicates the market may just have entered a danger zone.
The S&P 500 keeps closing just short of a critical level in the high 2400 range. This is similar to what happened going up to the 2000 dot com crash and the 2007 crash that ushered in the Great Recession.
This is investing via technical indicators. And if you are buying into an index fund that tracks the […]
When Do Terror Attacks Demolish Your Investment Portfolio?
Terrorists hit London just weeks after an attack in Manchester and investors look to see which way the markets will go. At the beginning of this year we asked, “Does extraordinary uncertainty lead to extraordinary market risk.” At the time we were writing about Trump’s plans for economic stimulus and the associated voodoo economics of his proposals. Today we are looking at frequent terror attacks and their effects on markets. In short, when do terror attacks demolish your investment portfolio and when are your investments secure in the face of random acts of violence motivated by politics and religion? Market […]
Has Over-Regulation Been Killing the US Stock Market?
In the last forty years the market capitalization of all stocks listed on US exchanges has risen from $704 billion to $27 Trillion. Forty years ago there were nearly 5,000 stocks listed on US exchanges and that rose to about 7,000 by twenty years ago. Today there are 3,600 listed companies in US markets. How is it that while market cap has gone up forty-fold the number of listed stocks has fallen by a third? Business Insider discusses the case of the missing US stocks.
The U.S. seems to be the only developed country that lost so many stocks. Most other […]
How to Evaluate Investment Opportunities
Investment opportunities come and go. Success comes from recognition of an opportunity and accurate analysis. It is in learning how to evaluate investment opportunities that investors find long term prosperity. Here are some thoughts on how to evaluate an investment from an article in Forbes.
Successful investing boils down to buying assets at a discount to intrinsic value. The greater the discount, the more likely the investment will perform. Benjamin Graham, the father of value investing, called this “margin of safety.” The concept is simple in theory and extremely challenging in practice, with the valuation process anything but straightforward.
The problem, as […]
Is the European Economy Ready to Boom?
The equity markets always look ahead and right now they are growing tired of waiting for the Trump boom and looking to Europe. According to CNBC Europe is the hot new trade in the stock market.
Amid the political uncertainty of Brexit, mounting social turmoil over immigration and barely there economic growth, Europe has improbably emerged as the hot stocks trade this year.
The postelection rally in U.S. equities is looking tired as gridlock has sapped momentum in Washington. Investors have been looking for a better place to grow cash, and the European market is quickly becoming the favorite target.
“We believe that […]
Does Low Volatility Predict a Positive Market?
According to CNBC you have to go back to 1994 to find a similar situation in the stock market. The S&P has gone a hundred days without a 1% dip. Besides being something they haven’t done for more than 20 years this low volatility may well predict a positive market going forward.
Since 1950, the market has logged only 21 other instances when the index traded without a 1 percent down day for 70 or more consecutive trading days, Johnson wrote in a recent report. The longest streak was in 1963, when the S&P 500 saw 184 straight trading sessions without […]
Do You Want a Safe Investment That Yields a High Return?
Profitable investing may not always require that you analyze stocks. The most practical and profitable investments often have to do with paying off debts! We wrote about this in our article about How to Invest Your Inheritance.
The first step before you start investing your inheritance is to get rid of any high interest debts such as credit card debt. It is not easy to make a return of eighteen percent per year per year on your investments. But that is what you are probably paying on credit card debt. Pay off your credit card debt first and foremost.
Also consider buying […]
What Impact Would Tighter Monetary Policy Have on Your Investments?
A new president is about to take office. Successful investors will be the ones who anticipate how the next administration and congress will affect the economy and how the various factors at play will affect investments. In the case of Trump and a Republican controlled congress we expect tax cuts, an attempt to bring corporate cash back from overseas and increased spending on U.S. infrastructure. If these plans come to fruition there will be at least short and medium term stimulus to the economy. A predictable result will also be increased interest rates, namely a tighter monetary policy. The value […]
Will Trump’s Trade Policies Kill His Stock Market Rally?
When it was clean that Trump would be the next president the stock market tanked. Then investors thought of the promises of lower taxes, corporate money repatriated from offshore and fiscal stimulus via infrastructure repairs. And the stock market rallied. Now the specter of a trade war emerges as Trump’s trade policies become clearer. Will Trump’s trade policies kill his stock market rally? Will they kill the American economy? The Huffington Post writes that that stocks could suffer as Trump’s trade policies take shape.
The year-end stocks rally on the heels of the election of Donald Trump as U.S. president was […]