I BELIEVE this little article pretty well sums up the next few weeks....if not....the next few months: Fiscal stimulus prospects and strong earnings tailwind may propel stocks in the week ahead https://www.cnbc.com/2021/02/05/fis...wind-may-propel-stocks-in-the-week-ahead.html (BOLD is my opinion OR what I consider important content) "Key Points Stocks have plenty to focus on in the week ahead, but most important is the fiscal stimulus package making its way through Congress. Interest rates have begun to rise again, and for now that is seen as a positive statement on the economy. As for the stock market, “I think the path of least resistance has resumed to a higher level. I think we had a mini correction a week ago and I think it happened pretty quickly,” said one strategist. Cornerstone Macro’s Carter Worth charts the Treasury yield and what it could mean for the record rally Stocks head into the week ahead with a tailwind, as investors focus on a hefty fiscal stimulus package and the solid earnings season against a backdrop of rising interest rates. There are several dozen S&P 500 companies reporting earnings, including Coca-Cola, Pepsico, Cisco and The Walt Disney Co. On the data front, there are just a few reports in the coming week, but the consumer price index inflation report is the important one to watch when it is released Wednesday. Federal Reserve chairman Jerome Powell speaks mid-week at a webinar hosted by the Economic Club of New York. Stocks surged in the past week, with the S&P 500 jumping 4.65% to a new record high, in its best week since November. The S&P 500 closed Friday at 3,886. The hyper-activity around short-squeeze names, like GameStop, receded in the past week. Market chatter turned to rising interest rates, the steepening yield curve and market expectations for inflation. “Rates are actually going up as really an expression of the potential that economic activity is likely to start accelerating, and we’ll likely see some inflation,” said Art Hogan, chief market strategist at National Securities. Hogan said investors will stay most focused on the $1.9 trillion stimulus package, which Democrats are pushing forward. If it is signed into law at its current size, the total federal spending due to the pandemic would be $5.3 trillion, according to Cowen, an investment bank. “I think the path of least resistance has resumed to a higher level. I think we had a mini correction a week ago and I think it happened pretty quickly,” said Hogan of National Securities. “I think we continue to grind higher and the only bumps in the road that I can see are a delay in fiscal stimulus or some exogenous factor come in and changes the dynamics,” he added. The market is also depending on continued improvement in new virus cases, said Hogan. Higher interest rates The prospect of more spending and an improving economy drove Treasury yields higher in the past week. The benchmark 10-year Treasury yield was at 1.16% late Friday, after edging to 1.18% earlier in the day, near its recent high of 1.19%. The 10-year is the most closely watched, as it influences the rates on mortgages and other consumer and business loans. Yields rise as the price of bonds decline. Market pros have also been watching another bond market metric: the yield curve. It is the spread between the yield on a short-term Treasury, like the 2-year note, and a longer duration Treasury, like the 10-year.In that case, the spread widened to reach 1.06% over the course of the week. Yield curve widest since 2017 That is the highest level since the second quarter of 2017. A steeper curve — which is what we’re seeing today — is viewed as a sign of an improving economy. Strategists say the move higher in Treasury yields so far is not detrimental to stocks, but instead is a reflection of the economic bounce that could come from the stimulus package. Tom Lee, head of research at Fundstrat Global Advisors, said the steepening curve is good for the stock market, creating a tailwind for his “epicenter” trade in stocks that will benefit from an improving post-Covid economy. His preferred sectors are the cyclicals — including industrials, consumer discretionary, materials, energy and financials. Lee said the selling by hedge funds after short squeezes in a number of stocks and the record decline in the VIX, the volatility index, has led him to change his view on the stock market. He previously expected a sell-off in the first half of the year. Now, Lee sees a “high probability that the first half 2021 correction is over.” The VIX, which is based on puts and calls in the S&P 500, started the week over 33 and fell to 20.87 when the market closed on Friday. A low VIX signals lowered expectations for market volatility. The sectors that did well in the past week were mostly the ones that will do better in a financial rebound, or in a higher rate environment. Financials were 6.6% higher in the past week as big banks rose along with the yield curve. Higher long-term interest rates are a positive for bank profits. The industrial group rose 4.9%, and materials were up 3.9%. Energy, lifted by a jump in oil prices, gained 8.3%. Tech recovered some ground, gaining 4.9%. Sectors that do not do particularly well with rising rates, were up less, including utilities, up 2.3%, and real estate investment trusts, up 3%. “It’s really about having an economic boom, allowing policy to support that boom,” said Jim Caron, head of global macro strategies on the global fixed income team at Morgan Stanley Investment Management. “That’s the key driver of why the curve is steepening.” Some strategists say the curve is also steepening because of the U.S. will be issuing a lot of debt to pay for the trillions in fiscal stimulus, and that would cause interest rates to rise. That has also triggered concerns about increasing inflation. While economists do not expect inflation to spike, they do see the potential, for the first time in years, for inflation to move meaningfully above 2%. Markets will also be monitoring the Senate impeachment trial of President Donald Trump, which begins Feb. 9. “It will get a lot of attention. Do the markets care? Maybe not, but everyone will be paying attention,” said Michael Schumacher, head of rate strategy at Wells Fargo Securities." "Week Ahead Calendar Monday Earnings: Hasbro, KKR, Loews Corp., Softbank, Dun and Bradstreet, Take Two Interactive, Nuance, Leggett and Platt, Simon Property Group 12:00 p.m. Cleveland Fed President Loretta Mester Tuesday Earnings: Cisco, Twitter, Lyft, Dupont, Mattel, Honda, Nissan, Centene, Hanesbrands, Canopy Growth, Martin Marietta Materials, Masco, Sealed Air, S&P Global, Hains Celestial , Fox Corp, Akamai, Owens-Illinois 6:00 a.m. NFIB small business survey 10:00 a.m. JOLTS 12:00 p.m. St. Louis Fed President James Bullard Wednesday Earnings: Coca-Cola, General Motors, Uber, Zillow, Under Armour, Cerner, Zynga, iRobot, MGM Resorts, Spirit Airlines, Lumen Technologies, Molina Healthcare, O’Reilly Automotive, Wyndham Hotels 8:30 a.m. CPI 10:00 a.m. Wholesale trade 2:00 p.m. Fed Chairman Jerome Powell webinar at the Economic Club of New York 2:00 p.m. Federal budget Thursday Earnings: PepsiCo, Walt Disney, Kraft Heinz, Expedia, AstraZeneca, Generac, Virtu Financial, Yeti, Kellogg, AllianceBernstein, Borg Warner, Duke Energy, Molson Coors, Tyson Foods, ArcelorMittal 8:30 a.m. Initial jobless claims Friday Earnings: Moody’s, Newell Brands, ING Groep 10:00 a.m. Consumer sentiment 10:00 a.m. New York Fed President John Williams" MY COMMENT YES....the above as drivers of the market over the next weeks and months are.....OBVIOUS. SO.....I am going with the PROBABILITY that they will in fact drive stocks and funds higher into April......and....perhaps beyond. BUT........in spite of my thinking......for the very reason that this information is OBVIOUS.....there will be a "chance" that this information is already fully discounted and some small event will distort the expected market behavior. That is what makes investing fun.....the thrill of the hunt and the unknown. That is ALSO what makes long term investing......"MY"....preferred investing method.
Yeah WXYZ, I can see I'm conflating an overall bear market versus individual stocks turning bearish. Sorry about that. In thinking more about it I guess that if all or most of my positions were indicating bearish simultaneously I don't think I would sell. If the market as a whole is bearish than there is little point in selling since finding stocks than aren't bearish yet is probably an unproductive effort and as you pointed out, you'll miss out when the market turns bullish again. That certainly differs from individual stocks turning bearish in an otherwise bullish market. In this situation I do hold to my plan to sell at a 7% or so drop.
Perhaps you might want to ....temper.....that 7% drop rule a bit to take into account actual market conditions. There could be many times that a holding drops 7%.....yet....it STILL has very good prospects going forward.......and....you might want to continue to hold it. BUT....good discussion topic.
Don't let others scare you out of a position. Spend some time reading the TSLA thread and read into TOMB's position, he went through some challenging times. Keep in mind his positions were PRE SPLIT , if you divide by 5 that would show his after split average. He held when others ran and his account gives the basketball effect a new meaning. He did INTENSIVE due diligence and rode the storm out, he was well rewarded for his patience and expertise. Solid companies have a solid history of riding out the storm. My opinion on the matter.
I believe the vast majority of people would have much better portfolio performance if fees were $250 per transaction
WELL....as has been the norm lately....my stock holdings got a nice boost during the last hour or so....especially the last 15-20 minutes of the market day. I ended up with a good green day....not the best day ever...but at least solid. I did get beat by the SP500 by .46%. About an hour or so to the close.......I had 8 or 9 positions that were negative. At the close I had 5 down and 7 up for the day. All in all....I will take it. It was one of those days....that throughout the day.....many of my particular holdings were not in favor. NVIDIA....was my big winner for the day being UP by $33.91 or 6.24%.
This has CERTAINLY been a volatile year so far......welcome to a normal market. SO.....being bored....it popped into my mind to see how I stand.....year to date in my primary account. Right now.....I am at +4.92%. The SP500 today is at +4.25%....year to date. I am somewhat surprised by these figures. I was not sure I was ahead of the SP500 year to date. A very pleasant surprise. So I am to the good by .67%. I WILL take it....not that I have any choice. ACTUALLY....I consider this an EXCEPTIONAL result.......for "my" portfolio......over just 5 weeks. I continue to hit new highs regularly......including today. LET THE GOOD TIMES ROLL.......RIDING THE DRAGON. NOT.........."Chasing the dragon"......traditional Chinese: is a slang phrase of Cantonese origin from Hong Kong referring to inhaling the vapor from a heated solution of morphine, heroin, oxycodone, opium, or ya ba (a pill containing caffeine and methamphetamine)"
Solidly green day. 1.33 & 0.46 on both of my accounts. All time high. can it be THAT easy?? I’m waiting for the hammer to drop anytime now... Was looking at the “lost decade” chart; 2000-10 decade that is, sheesh that WASNT a fun time to be in the stock market I bet... I have half of my “investment” money’s sitting in the sideline, waiting for a disaster like this to hit, just so I can get in IF and when we get into dire times like these again... I wouldn’t necessarily call it market timing because I plan on leaving all my long term investments intact even if the market crashes, but I do plan on buying if there’s another correction just like I did last year during feb-March. And I didn’t even call it market timing back then.. I called it more... kiss that money goodbye for another decade type of investment...
YES.....2000 to 2003......part of the ten year run described by Zukodany above. I remember those 3 years.....VERY WELL. I RETIRED in June of 1999. THAN....over the first three years of my very early retirement......age 49.....self funded by personal assets.......the SP500 and the markets proceeded to go down........9.10% in 2000.......11.89% in 2001......and 22.10% in 2002. For a total LOSS of 43.09%. FUN TIMES. It Actually worked out ok.....since at that time I was keeping 5 years of cash in reserve for living expenses.....and......over the first 5 years of my retirement I had money coming in from my FORMER business.....which I invested. For.....most people...... to get hit by that sort of BEAR MARKET at the start of retirement can be a real KILLER. Take that loss of 43.09% and add onto it the money that you are withdrawing from your retirement funds every year to live on.....and.....someone could potentially see their retirement funds DISSIPATE by 55% to 75% in just three years. This is something that is very difficult to explain to people about retirement with NO pension. People look at their retirement account with.....lets say $1.5MIL....and have NO CLUE that they could be down to ONLY......$600,000 to $800,000 left....... in ONLY three years of retirement. From what I have seen with people I know that have retired......EVERYONE.......underestimates their expenses in retirement........and........overestimates how much they can gain in their retirement stock account during retirement.
Yes, it can be that easy. We may never have a market correction or liquidity crisis again, in our lifetimes. What it comes down to is this: What are the chances of a financial collapse? The odds are extremely high a collapse will happen, at some point. When things go wrong, it can be extremely difficult to get things going again. Also, what's going to happen when generalized AI puts huge tracts of people out of work? The WBI is currently at 193%. What that means, nobody knows. This is uncharted territory. I'm currently at 46% cash with a lot more to come in early March. I'm still buying, but only when I find value so it's pretty rare. I suggest a multi-faceted approach is warranted. - Keep a lot of money in the market, because that is almost always the right thing. - Keep some money aside, to go on offence in a panic situation. - Have a couple of years of reserve, in case money dries up for an extended period of time. This is easier said than done. Not many people can have two years of life money plus cash to weaponize in a crisis. It helps to be in retirement, with low expenses and a reasonable nest egg. On the other hand, we are still in most buoyant period of investing in history. There is always a danger of a crisis. Now is no different but we are all cashed up from a decade of heavy returns. I doubt we will see a new high water mark of financial problems in the near future but we could well feel a pinch. By the way, I will always buy a company when I see value, even when the WBI is 193%. Defense-only is a loser. You have to keep moving the ball down field to have any possibility of a victory.
I would like to point out a real life example of why maybe choosing a well managed mutual fund with low fees or an index ETF may be better than picking stocks for most people. I purchased about $5,000 (I know, big money) worth of some stocks and ETFs in late July last year. Here are my results on these lots since then: AAPL: 25.57% ATVI: 21.92% COST: 10.18% SPY: 22.01% Obviously, I am not as well diversified in my individual stock picks as many of you being I only own 3 companies. Mostly because of how high priced per share some companies are right now. I realize it doesn’t matter what the price per share is but I makes it more of a logistical problem to invest with $5000 when a share of Amazon is $3000. The point is that I would probably be better off had I put all my money into an S&P ETF rather than individual stocks. However, take it with a grain of salt because there has been various times when each stock would have been better than the SPY.
Zukodany The problem with looking at an isolated time period like 2000 to 2010 is the fact that it is totally artificial. The markets did NOT begin in 2000 and end in 2010........so using that year as a starting point.....and.....ending in 2010...... gives a false result. Is that REALLY a lost decade.........ONLY for someone that........ONLY.......invested from 2000 to 2010. For example....use a starting point of 1975 and an end point of 2020. You get a totally different result and view of the markets. Or use a starting point of 1988 and end at 2000.....or 2003.....or 2007. Isolating a particular SMALL time period does NOT give an accurate view of investing.....or.....returns. What is CRITICAL is investing and being invested for many decades. Doing that makes any small time period simply an aberration compared to the whole........especially the down years. AND....for someone like myself that has been investing since the 1970's....that WHOLE.....is VASTLY POSITIVE. That is my philosophical view of the markets and investing. Jwalker There is a very good reason that Warren Buffett has set up his estate to have 90% invested in the SP500 for his heirs. The ODDS are EXTREMELY LOW....that any one investor....no matter how talented........will beat the SP500....especially.....over the long term. BUT....most people....being human...just can not give in and let an unmanaged index do the long term work. I have the same plan for my survivors or heirs as Buffett. They are to simply put EVERYTHING in the SP500.
Thank you W for the words of wisdom. It always makes sense and always helps to look at the big picture. Your plan of having x amount of years worth of cash as backup ABSOLUTELY makes sense to me. We have just that in savings and we’re still running a successful business... heck... even the comic books business helped us out during the past 3-4 months last year when EVERYTHING ELSE was closed and the markets took a break... the whole topic of the lost decade came to play when the markets opened at a solid green for us and lo and behold - WIFEY asked me... so.. if we’re making that kind of money in one day, how about we put more money, or even sell our business and just live off the markets just like your boyfriend from the internet that you always tell me about (er, that’s YOU W). So I pointed her attention to that example. And so... my question would be- when the markets were in a coma for those 3 years that you mentioned 2000-2003... did you continue to put in more cash regularly (I think you mentioned you distribute money’s annually to your accounts?) and of course... we CANNOT just look at that example from history and assume the EXACT thing will happen again. It may happen for a longer period or short or NEVER... And a follow up question would be, while the markets turned bearish - did you manage to invest in stocks that were outperforming the overall downward trajectory? Very curious!
ZUKODANY asked: "my question would be- when the markets were in a coma for those 3 years that you mentioned 2000-2003... did you continue to put in more cash regularly (I think you mentioned you distribute money’s annually to your accounts?) and of course... we CANNOT just look at that example from history and assume the EXACT thing will happen again. It may happen for a longer period or short or NEVER... And a follow up question would be, while the markets turned bearish - did you manage to invest in stocks that were outperforming the overall downward trajectory?" First question - YES. When I would get money in from my former business.....I would put those funds into my brokerage account and invest it immediately.......as I usually do......all in all at once. I got money from my former business for about 5-6 years....I cant remember exactly........as I would get it I would put it in and invest it. So....I invested all through that time period and remained fully invested all the time as usual. At that time.....the majority of my individual stocks....under my portfolio model.....were my usual big cap, dominant, iconic, type companies. But....back than the majority of them were stocks like...Phillip Morris, Colgate, Proctor & Gamble, Pepsi, Coke, and other GREAT DIVIDEND paying companies........NOT tech companies or risky companies. So....I had a good amount of dividends also reinvesting during that time. Second question - I kept my regular stocks and funds and did not make any changes. The great majority of my stocks were as described above in the first question answer. I was able to outperform during that time period by some small amount.....since the stocks that I owned were the cream of the crop of BIG CAP companies that were the backbone of the American economy and even though they dropped they did not drop as much. I dont have exact figures....but I do distinctly remember my.....very...... long term total return that I was recording back than did NOT drop below 14% even in those years. I cant remember details and do not have records.....I had a BIG long term total return going into that period primarily due to my investment in Microsoft in 1990 which I sold out in......either 2000 or 2002.....I think it was 2000.....but I dont have records and cant remember for sure. In any event......I SURVIVED that time by investing money all through it including dividends and having 5 years of cash to start the time period for living expenses. HOWEVER......I remember very well.....that three year drop did get my attention and caused me to do MUCH MORE long term projections and planing for my retirement money. It.....definately reinforced....for me that funds can disappear much quicker than people think in retirement......and......the importance of keeping a cash reserve for living expenses when living off your personal assets. I was VERY GLAD to have a FREE AND CLEAR home and no house payment during that time as well as NO DEBT. By the way.......If it was me......I would not liquidate everything and put it ALL in stocks if I had multiple income streams......like a successful business. I think the diversification is a good thing. YOU have the best of ALL WORLDS with your real estate in NY, your business income, and your investing. PLUS......what you are currently seeing in your investing is VERY SHORT TERM.....you are right to look at all the possible outcomes.....especially the negative ones and project for the future taking into account the.......the WORST CASE as well as the BEST CASE. That is what I have always done....very clinically calculated worst case and best case and MADE SURE I could live with the worst case. As a business owner.....I am sure you do the same.
BLAH....open today....but....I am not giving up on the day. We have seen such erratic action on many days between the open and the close.....who knows what the day will bring. At least the NASDAQ is positive at the moment. I looked at my account about 30-60 minutes ago. I had a TEENY-TINY gain....just slightly positive. The day is young......and......we are not down much....so I still have hope for today. In any event.....one day is NOTHING over the long term.
Makes total sense W! And my issue with our successful business is the “silent partner”, the big brother that always, ALWAYS takes more and more and more from our real estate/business investment. After all... it is an investment as well... one that yields roughly 5% of its overall worth.... But of course we have absolutely NO RIGHT to complain... we’ve endured a lot and even through these rough times.. we’re still kicking ass! As that business owner - I could never understand how it’s all possible... But we must be doing something right.... And overall there is also this thing called life, and everything that we do to fill it with happiness, excitement, fulfilment and joy... Part of it is our business- it is our baby (well, she’s much older than that truthfully, but we still call her our baby) and it seems that everybody likes her The same thing is with my eBay hustle... we love doing it first and foremost... it makes us a little bit of spending money.. and sometimes even more than that... Funny thing is I used to DJ professionally before I quit (since I got married - no surprise there!) and eBay took over that “loss”. So we progress through life, and now I found about the stock market and so far (tfu, tfu, tfu... old Yiddish expression) we’re loving it and it’s the latest addition to our “family” portfolio... So we’re not liquidating yet, but there’s a lot of dialog around the dinning table about “the future”
Never a bad thing to talk about and plan for the......future. A WORD OF CAUTION......for general investors......not necessarily any of the regular posters on here. My opinion......many, many people are taking....way more risk.....than they know. Many people are way too focused on risky stocks and tech. Many people have.......NEVER.....experienced a REAL bear market. Many people do not realize how short term they are in their investment thinking. People have been spoiled. Over the past......12 years of investing we have NEVER had a BAD down year. The ONLY down year over 2009 to 2020....is.....2018......and....that was only a loss of (-4.52%) for the SP500. The LAST big loss was 2008.....with a loss of (-37.02%). PRIOR to 2008 the last big loss year was 2002......down (-22.60%). I am....guessing...that MANY of the investors....today....were not investors in 2008. WHEN....not if.....we have another bear market it will last for 1-3 years. It will be ABSOLUTELY SOUL SUCKING. EVERYONE you know will be bailing out. EVERYONE you know will be telling you that you are an IDIOT for investing in stocks and funds. You WILL.....severely....doubt yourself. It WILL wear you down. It will be CONSTANT negativity in the media along with extreme DOOM&GLOOM. It will drag on month after month after month. ALL the young companies and risky tech companies will get HAMMERED. Even the BIG OLD companies will be down. MOST people....will not.....be able to take it and they will sell. It will seem like.....and there will be many articles and news items.....that it is the new normal.....investing in stocks is over and will never come back. SO......be warned.....sooner or later it will happen. "I" will STILL be here......hopefully competent and physically alive and spouting the same long term investing stuff. Those of us....on here....talking about the long term.....and....being fully invested all the time.....WILL....be derided as MORONS. I hope you are here with me....so....we can give each other moral support.
