The Long Term Investor

It NEVER hurts to understand a bit of history. My mom....the source of my investing beginning and an early investing mentor...started to invest in the 1950's. Here is a look at how it was back than.

https://www.investopedia.com/articles/stocks/09/stocks-1950s-1970s.asp

"Investing in the 1950s
According to the first share owner census undertaken by the New York Stock Exchange (NYSE) in 1952, only 6.5 million Americans owned common stock (about 4.2% of the U.S. population). With a generation scarred by the market crash of 1929 and the Great Depression of the 1930s, most people in the 1950s stayed away from stocks. In fact, it was only in 1954 that the Dow Jones Industrial Average (DJIA) surpassed its 1929 peak, a full 25 years after the crash.

The process of investing was also more time consuming and expensive in the 1950s than it is now. Thanks to the Glass-Steagall Act of 1933, which prohibited commercial banks from doing business on Wall Street, stock brokerages were independent entities.

Fixed commissions were the norm, and limited competition meant that these commissions were quite high and non-negotiable. The limitations of technology in those days meant that the execution of stock trades, from initial contact between an investor and a broker, to the time the trade ticket was created and executed, took a considerable amount of time.

Investment choices in the 1950s were also quite limited. The great mutual fund boom was still years away, and the concept of overseas investing was non-existent. Active stock prices were also somewhat difficult to obtain; an investor who wanted a current price quotation on a stock had few alternatives but to get in touch with a stockbroker.

Although thin trading volumes reflected the relative novelty of stock investing at the time, things were already beginning to change by the mid-1950s. 1953 marked the last year in which daily trading volumes on the NYSE were below one million shares. In 1954, the NYSE announced its monthly investment plan program, which allowed investors to invest as little as $40 per month. This development was the precursor to the monthly investment programs that were marketed by most mutual funds years later, which in turn led to the widespread adoption of stock investing among the U.S. population in the 1970s and 1980s."

MY COMMENT

Many of the limitations and restrictions and business practices of the early days of investing did not go away till the 1970's and 1980's. My mom came from a business family that owned a small town Savings & Loan and Abstract Company in addition to selling some real estate. She worked for the family business in High School and summers in college. She got some training in business accounting and keeping books working for the family business. She also had the intuiative background to be an EARLY investor since she was a MATH WHIZ and valedictorian....even though she was NOT allowed to major in math in college......since she was a female. Her father was a stock investor in addition to being a businessman and I assume was an investing mentor to her. She and her brother were the only two out of all the kids that had the...business gene.

As kids we were LUCKY to be in a family where money was openly discussed. My sister and I had our first brokerage accounts by the late 1960's or early 1970's. I remember one of my earliest stocks was shares of Schering-Plough and a few others......we were routinely given 5 shares each at Christmas over a number of years starting in the late 1960's....in addition to our REAL presents. This DEFINITELY got us interested in investing although we really knew NOTHING.

I have carried on the obligation to try to educate my kids about investing and money....one of the important roles of a parent......if they have the knowledge to do so.

 

Zukodany....is trying to use REVERSE PSYCHOLOGY on the markets for tomorrow.....I hope it works.

That is a pretty nice day you had today, Zukodany....a gain of 1.14% in one day. Just goes to show how quickly a portfolio can come alive and suddenly move up. Seems like you might be in good shape for the rest of the year.

 

Jwalker

That Growth Fund Of America....has an amazing record. I would have definately purchased it long ago if it was not a LOAD fund. I am set with what I own now.....so no interest in it. BUT.....glad to see that you own it.....I dont think you can go wrong with that fund as a long term holding. It seems to basically track the SP500 if you look at a chart of the two.

With those two funds being 80% of your portfolio and your contributions.....plus your young age....you will be set for a lifetime of SOLID GAINS.......with having to spend little to no time or effort.....well done.

 

A question Zukodany.....are you seeing a drop off in the comic business or rising prices? Is the collectable market still strong on the items that you watch? Seems like to me that the ART market has slowed down a bit lately.....although it is still very strong for the best quality pieces.

 

OK....good, thanks. That is the same as my impression has been lately. I was thinking that things had slowed done some in the collectable, antique, art, etc, etc, markets.

I agree....NORMAL...is a good thing in those markets. Boom and bust speculation does not do any favors to the regular collectors or those that are into collecting as a life long hobby or avocation. STABILITY is important to collecting....rampant speculation is not a good thing.....in my opinion.

 

As usual....I like this little article and what it shows.....this sort of caution is a good indicator of the continuation of the greatest BULL MARKET in history.

Investors Hunker in Money-Market Funds to Flee Confusing Markets

https://finance.yahoo.com/news/investors-hunker-money-market-funds-055135697.html

(BOLD is my opinion OR what I consider important content)

"(Bloomberg) -- Investors are showing increasing signs of risk-aversion at the start of August, a historically difficult month for asset allocations, highlighting uncertainty about inflation and the delta variant of Covid-19.

Flows data showed that over half the $44 billion taken in by EPFR-tracked fund groups in the week through Aug. 4 went into money-market cohorts. Equity funds, which have seen net inflows every week this year, registered the fourth-smallest intake year-to-date, according to the financial-data firm. Inflation-protected bond funds recorded their 37th straight inflow, while gold-related cohorts had their biggest takings in about two months.

“Investors are treading cautiously -- if at all -- in early August,” EPFR’s report said. “What to make of a market where the response to fears of slowing global growth is a string of record highs in equity markets on both sides of the Atlantic? How best to position yourself when inflation in the U.S. is, by some measures, at a 30-year high but the stock of global debt with negative interest rates recently hit a seven-month high?”

Signs of hesitation have emerged heading into August and September, months that tended, in recent decades, to have elevated volatility for equities. Risk-avoidance also arrived as the delta variant of Covid wreaks havoc with reopening investment playbooks and amid concern that inflation could become difficult for central banks to combat.

At the same time, many strategists see further gains for stocks as those hit hard by Covid recover amid reopenings.

Faced with these contradictory signals, the report said, “many investors opted to take a step back.”

EPFR, a subsidiary of Informa Plc, tracks flows and asset-allocation data on over 134,250 traditional and alternative funds globally, according to the report."

MY COMMENT

Confusing markets? Not really. What is going on now seems.....INCREDIBLY......obvious to me right now. BUT....I am an OLD investor that is not concerned with the short term....."stuff"......that is pushed in the financial media every day.

I am CERTAINLY not going to put money into a money market fund.....at the insanely low rates that have been the norm for a long time now. At worst....I will put stock market money that is not currently being used into the SP500. I am a stock INVESTOR....not a speculator.....so I want my money exposed to the markets.

I suspect that the people above....at least a large percentage of them........think they are being prudent and safe. BUT...actually...they are unknowing speculators. I would prefer to have my money siting in the SP500 for the long term compared to jumping in or out of the markets. REALITY tells me that the PERCENTAGES are far superior being invested in a BIG INDEX over the long term compared to investing or not investing based on EMOTION.

As to worry about what month of the year it is......just SILLY.

 

This little article reflects the economic news that no one will care about.....although i dont think the data is as strong as the article implies.
July jobs report: Economy adds back 943,000 payrolls, unemployment rate falls to 5.4%

https://finance.yahoo.com/news/jobs-report-july-2021-184922622.html

(BOLD is my opinion OR what I consider important content)

"U.S. employers added back more jobs than expected last month, with payroll gains moving in tandem with improving economic activity and consumer mobility during the recovery. The jobless rate also fell to the lowest level since March 2020, improving more than expected.

The U.S. Labor Department released its July jobs report Friday morning at 8:30 a.m. ET. Here were the main metrics from the report, compared to consensus estimates compiled by Bloomberg:

• Change in non-farm payrolls: +943,000 vs. +865,000 expected and a revised +938,000 in June
• Unemployment rate:5.4% vs. 5.7% expected and 5.9% in June
• Average hourly earnings, month-on-month: 0.4% vs. 0.3% expected and 0.3% in June
• Average hourly earnings, year-on-year: 4.0% vs. 3.9% expected and 3.6% in June

At 943,000, payrolls last month grew by the most since August 2020. Job growth was also upwardly revised for May, coming in at 614,000 versus the 583,000 previously reported, and for June, with an upward revision to 938,000 from 850,000.

The economy, however, is still trying to recoup millions of jobs lost since the start of the pandemic. On net, the economy has shed 5.7 million payrolls since March of last year, with much of this deficit still present in the leisure and hospitality industries. These employers shed a total of nearly 2 million jobs since the pandemic first brought about shutdowns across the U.S.

Leisure and hospitality employers were again the leaders in bringing back jobs last month, with payrolls rising by 380,000 to comprise more than a third of the total July jobs gains. In the private sector, education and health services employment also contributed notably, with payrolls increasing by nearly 90,000.

A significant contributor to the July payrolls report also came from government jobs, especially in education. Overall, government payrolls were up by 240,000 last month. These increases, however, may overstate the extent of actual job growth occurring in the sector, given seasonal adjustment issues due to the pandemic.

"Staffing fluctuations in education due to the pandemic have distorted the normal seasonal buildup and layoff patterns, likely contributing to the job gains in July," the Labor Department said in its report Friday. "Without the typical seasonal employment increases earlier, there were fewer layoffs at the end of the school year, resulting in job gains after seasonal adjustment. These variations make it more challenging to discern the current employment trends in these education industries."

Since the June jobs report, the Delta variant has swept across the country, exacerbating many workers' concerns over becoming infected in the workplace. Plus, difficulties finding childcare over the summer and the ongoing support of federal unemployment enhanced benefits have lingered, generating a confluence of factors that may have kept more individuals sidelined from the labor market. Still, these factors were not enough to offset the momentum present across the economy this summer.

Still, for the economy, bringing back enough workers to meet surging consumer demand has become a major issue weighing on the overall pace of growth. Job shortages have hit both the manufacturing and service sectors, with many employers raising wages to compete for workers. As a result, average hourly earnings rose by another 0.4% month-on-month, and accelerated more than expected to a 4.0% year-on-year pace in July.

Heading into Friday's report, other data on the labor market have been mixed. Encouragingly, the Institute for Supply Management's July manufacturing and services indexes both showed employment growth flipped back into expansionary territory after contracting in June. Weekly initial jobless claims have been choppy, but have largely continued on a downtrend this summer. However, ADP's closely watched monthly payrolls report out Wednesday represented a sharp downside disappointment, with private payrolls rising by just 330,000 compared to the 690,000 consensus estimate.

For investors, however, a slight moderation in job growth could be taken as a potential positive for markets, if it disincentives central bank officials from removing their highly accommodative monetary policies in the near-term. Federal Reserve Governor Christopher Waller said earlier this week that he would support announcing tapering of the central bank's crisis-era bond purchases by September if the next couple jobs report come in strongly. Likewise, Federal Reserve Vice Chair Richard Clarida said he would back an interest rate increase in 2023 if the economic recovery continues on its current trajectory.

"If the ADP is to be believed and employment growth has slowed again, then that would support the doves who appear to want to wait until early next year to begin the taper," Paul Ashworth, chief U.S. economist for Capital Economics, wrote in a note. "The July report, due this Friday, is especially important because it is the last employment data the Fed will have ahead of the Jackson Hole Symposium toward the end of this month."

The Fed will discuss policy at its annual Jackson Hole Symposium scheduled for Aug. 26 to 28."

MY COMMENT

If anything this report shows that when about half the states CUT out the FREE MONEY...there is an impact on employment.....even though the financial media for some reason hates to believe this.

In addition.....I prefer to believe the ADP numbers which were negative. The BIG DIFFERENCE between the two numbers.....the ADP and this report.....is that this report includes GOVERNMENT jobs while the ADP is private sector. The government job data SKEWS the results. My view is that the ADP reflects the actual state of the PRIVATE economy....which is what actually counts......especially for investors.

Increase in jobs due to government jobs....is worthless to me as a private investor. This article does not show it....but....in one article that I saw I noted that the private sector jobs actually decreased.

In any event...meaningless data...other than for a day or two.....since.....I DO NOT invest according to general economic statistics.

 

OK....LOL....I am going to look at my account now. I have been putting it off so far today.....since....I just know this is the sort of day that looks great....but is not going to be friendly to my account. I hope I am pleasantly surprised....but I dont think so.

 

YEP....just as I expected. A definite RED day for me so far today. I had ONLY a single stock in the green....HONEYWELL.

I will just have to hang my hat on the fact that it is very early in the day and perhaps the rising general market today will turn around my particular stocks as the day progresses. ALTHOUGH....the averages at the moment dont look all that strong to me....so there is a risk of the day turning negative.

Looks to me like the sort of day that will be good for ZUKODANY....so far.

 

The above post by Pmw55 is out of context since we jumped to a new page....here is his original post on the prior page:

HERE is Emmett's reply:

"take the money and run. that was a huge gap up on the chart. could retrace to fill the gap."

(See prior page for his full reply with a chart)