Nothing wrong with Index Funds....Blake. And....with your assets...nothing wrong with taking a bit of chance with some leverage. You are smart to keep it to a small percentage of your total. Bottom line....if it works for you...just keep doing it over and over and over.
How we start the day. S&P 500 opens higher after steep selloff https://finance.yahoo.com/news/sp-5...elloff-stock-market-news-today-112114713.html (BOLD is my opinion OR what I consider important content) "Wall Street stocks opened in the green on Wednesday, trying to mount a comeback from steep losses fueled by concerns about the impact on the US economy of interest rates staying higher for longer. The S&P 500 (^GSPC) ticked up 0.3%, while the Dow Jones Industrial Average (^DJI) was up almost 0.1% at last check. The tech-heavy Nasdaq Composite (^IXIC) rose 0.6%. The moves mark a slight recovery after a brutal selloff on Tuesday that saw the Dow post its worst day since March. Waning consumer confidence and a looming government shutdown brought more worry to investors already fretting about Federal Reserve's message that rates likely haven't peaked yet. Stocks have fallen in recent days as the market increasingly took on board that borrowing costs would stay elevated for longer than hoped. But the signs of a recovery suggest some investors believe the shakeout may have been overdone, according to analysts. The benchmark 10-year Treasury yield (^TNX) pulled back on Wednesday after settling at another 16-year high the previous session. The recent surge in yields has weighed on risk markets like stocks. Meanwhile, the prospect of a US government shutdown is increasingly preying on nerves, as the weekend deadline for a budget deal nears. Late on Tuesday, the Senate put forward a 79-page bill to keep the government funded until November 17, likely the last chance of averting closure. In individual stocks, Costco shares slipped ahead of the bell after the retailer missed on same-store sales expectations even as its earnings beat estimates. In economic data, updates on durable goods and mortgage applications serve as appetizers for the US second quarter GDP report on Thursday and the Fed-favored reading on PCE inflation on Friday." MY COMMENT You have got to be kidding....who cares about the government shut-down. A total non-event. AND.....you can bet your bippy.....this minor sell-off is way overdone. Of course COST opened down....but it is up BIG right now.
Speaking of Costco. Costco membership price hike ‘a question of when, not if’: CFO https://nypost.com/2023/09/27/costco-membership-price-increase-a-question-of-when-not-if/ (BOLD is my opinion OR what I consider important content) "Costco executives signaled that the warehouse club plans to raise the price of its yearly memberships — and that the only remaining question is about the timing. On a call with investors following its fiscal fourth-quarter results on Tuesday — where revenue came in at $77.43 billion, just short of Wall Street’s forecasts of $77.72 billion — Costco’s Chief Financial Officer Richard Galanti said it’s a “question of when, not if” when asked about the prospect of hiking the membership price. “We’ll let you know when we know,” Galanti added. “So, you know, stay tuned. We’ll keep you posted.” Costco’s basic membership, known as Gold Star, has been $60 per year since 2017 — when it raised the price by $5 for the first time since 2011. Its Executive Membership runs customers $120 per year, plus gives members additional discounts and a 2% return on qualifying purchases. Should Costco raise its membership fees, it would impact the nearly 130 million Americans who shop at the retailer’s 591 locations. Costco CFO Richard Galanti said that the warehouse club wouldn’t be raising its membership prices — yet. Costco Galanti attributed the soft sales to a decrease in spending on discretionary and big-ticket items as consumers feel the squeeze of high inflation. The average transaction at Costco was down 4.5% among US shoppers, “impacted in large part from weakness in bigger ticket nonfood discretionary items, as well as the gas price deflation,” Galanti said. According to the American Automobile Association, the average price for a gallon of unleaded gas currently sits at $3.83 — a decrease from June 2022’s peak, when the average coast was $5.01. However, sales were saved by Costco members’ “relatively strong” spending in the grocery category. Galanti noted during the company’s latest earnings call that membership was up in the fourth quarter. The number of cardholders was up 7.6% from last year’s period, to 127.9 million, while household members — where people who live at the same address as the primary accountholder is gifted a free membership card — was up 7.9% from last year’s period, to 71 million paid households. Despite the increase in shoppers, same-store sales, including gas and foreign exchange, rose just 1.1% in the fourth quarter, missing expectations of 1.87%. Excluding gas and foreign exchange, sales were up 3.8%, below the 3.92% Wall Street anticipated. Galanti said the retailer added as many as 50 so-called “smaller ticket indulgent items” like snacks that he said increased the number of items shoppers are putting in their baskets. Investors seemingly took cues from Costco’s losses in the quarter, and shares fell over 1%, to $552.96, in premarket trading on Wednesday." MY COMMENT Real investors.....not pre-market speculators.......are driving the price of COST up today.....as they should be. The membership hikes when they happen are the closest thing to FREE MONEY in the business world. Basically a license to mint money for this company. It will happen....just like it always does.....and it is money in the bank for shareholders. Fortunately for business and the long term future of their business model......... the management at COST is very rational and reasonable and do not take advantage of their customers by raising the membership fee too often or too much.
This is good news for NVDA stock and investors. Microsoft technology chief says supply of Nvidia’s AI chips is improving https://www.cnbc.com/2023/09/27/mic...s-supply-of-nvidia-ai-chips-is-improving.html (BOLD is my opinion OR what I consider important content) "Key Points Kevin Scott, Microsoft’s chief technology officer, said supply of Nvidia’s graphics processing units (GPUs) is improving. OpenAI’s ChatGPT, which runs in Microsoft’s Azure cloud, is seeing some slowdown, which is making it easier to access GPUs. Microsoft has been investing in silicon, but Nvidia’s chips have been the best available option the past few years, Scott said. Microsoft technology chief Kevin Scott said on Wednesday that the company is having an easier time getting accessing to Nvidia ’s chips that run artificial intelligence workloads than it was a few months ago. Speaking on stage at the Code Conference in Dana Point, California, Scott said the market for Nvidia’s graphics processing units (GPUs) is opening up a little. The GPUs have been heavily in demand since Microsoft-backed OpenAi launched the ChatGPT chatbot late last year. “Demand was far exceeding the supply of GPU capacity that the whole ecosystem could produce,” Scott told the Verge’s Nilay Patel. “That is resolving. It’s still tight, but it’s getting better every week, and we’ve got more good news ahead of us than bad on that front, which is great.” Microsoft, like Google and other tech companies, has been quickly adding generative AI to its own products and selling the technology’s capabilities to clients. Training and deploying the underlying AI models has mainly relied on Nvidia’s GPUs, creating scarcity of supply. Nvidia said last month that it expects revenue growth this quarter of 170% from a year earlier. The company has such control of the AI chip market that its gross margin shot up from 44% to 70% in a year. Nvidia’s stock price is up 190% in 2023, far outpacing every other member of the S&P 500. In an interview with Patel that was published in May, Scott said that one of his responsibilities is controlling the GPU budget across Microsoft. He called it “a terrible job” that’s been “miserable for five years now.” “It’s easier now than when we talked last time,” Scott said on Wednesday. At that time, generative AI technologies were still new and attracting broad attention form the public, he said. The increased supply “makes my job of adjudicating these very gnarly conflicts less terrible,” he said. Nvidia expects to increase supply each quarter through next year, finance chief Colette Kress told analysts on last month’s earnings call. Traffic to ChatGPT has declined month over month for three consecutive months, Similarweb said in a blog post. Microsoft provides Azure cloud-computing services to OpenAI. Meanwhile, Microsoft is planning to start selling access to its Microsoft 365 Copilot to large organizations with subscriptions to its productivity software in November. Scott declined to address the accuracy of media reports regarding Microsoft’s development of a custom AI chip, but he did highlight the company’s in-house silicon work. Microsoft has previously worked with Qualcomm on an Arm-based chip for Surface PCs. “I’m not confirming anything, but I will say that we’ve got a pretty substantial silicon investment that we’ve had for years,” Scott said. “And the thing that we will do is we’ll make sure that we’re making the best choices for how we build these systems, using whatever options we have available. And, like, the best option that’s been available during the last handful of years has been Nvidia.”" MY COMMENT As supply ramps up this will mean BIG BUCKS for NVDA. They are able to sell every single one of these chips that they can produce. When you have a run-away product it is frustrating to see your sales restricted by supply issues. This ramp-up in production and supply should make NVDA shareholders very happy with future earnings reports. If this is happening right now.....we should see a little bit of this in the next earnings report......and.....ESPECIALLY in the next 2-4 earnings reports after that.
I will certainly be sending a THANK YOU card to our government. Our capability to shoot ourselves in the foot is endless. Oil jumps to 2023 highs amid low tank levels at US storage hub https://finance.yahoo.com/news/oil-...-tank-levels-at-us-storage-hub-182901923.html
Probably the short term story of the day. 10-year Treasury yield reaches level not seen in more than 15 years https://www.cnbc.com/2023/09/27/us-treasury-yields-investors-assess-state-of-the-economy.html (BOLD is my opinion OR what I consider important content) "The benchmark 10-year Treasury yield rose Wednesday, reaching its highest level in more than 15 years, as traders weighed fears of persistent inflation and tighter monetary policy for longer than expected. The 10-year Treasury yield gained 6 basis points to 4.616%. It had risen as high as 4.566% on Tuesday, its highest level since 2007. The 2-year Treasury yield also added 6 basis points to 5.135%. Yields and prices have an inverted relationship and one basis point equals 0.01%." MY COMMENT I see this as primarily the action of Bond Vigilantes and activist traders legally manipulating the markets. Some of this increase is due to the FED.....but...it is being used by traders to drive markets and make short term trading profits. Sooner or later....as always....it will collapse.
I ended the day today with a nice little medium gain in my stocks. Mostly compliments of COST, GOOGL, and NVDA....my best gainers. MSFT was also up today. As to my other stocks.....AMZN....ended the day at 0.00% gain.....at least not a loss. My other holdings were red. I also got in a nice beat on the SP500 today by 0.63%. ONWARD AND UPWARD.
Geez if I was retired in my 60s now I’d put most of my wealth into the 20 yr… prolly a 70/30 on the treasury/sp500 index but I’m not so just a thought Carry on
US Treasury Rates The US treasury yield curve rates are updated at the end of each trading day. All data is sourced from the Daily Treasury Par Yield Curve Rates data provided by the Treasury.gov website. Treasury Current Yield Change Previous Yield 1 Month Treasury 5.54% 0.00 5.54% 2 Month Treasury 5.59% 0.01 5.58% 3 Month Treasury 5.58% 0.00 5.58% 4 Month Treasury 5.62% 0.01 5.61% 6 Month Treasury 5.53% 0.00 5.53% 1 Year Treasury 5.49% 0.04 5.45% 2 Year Treasury 5.10% 0.06 5.04% 3 Year Treasury 4.89% 0.05 4.84% 5 Year Treasury 4.67% 0.05 4.62% 7 Year Treasury 4.69% 0.07 4.62% 10 Year Treasury 4.61% 0.05 4.56% 20 Year Treasury 4.91% 0.05 4.86% 30 Year Treasury 4.73% 0.03 4.70% Treasury rates updated on 2023-09-27 with data sourced from Treasury.gov.
Some of the CD rates lately at Fidelity as of 09-28-23. CD's even...odd times we are in. 3 month- 5.45 6 month- 5.50 9 month- 5.55 12 month- 5.55 18 month-5.50 2 year- 5.35 3 year- 5.10 4 year- 4.85 5 year- 4.75
As zukodany briefly mentioned above. I suspect many investors are taking advantage of some of the other tools available to mange/or add to their plan. Especially those that may be approaching or in retirement. Heck, even parking some short term cash in some of this could be beneficial to some if needed.
The post by Smokie above with the CD rates shows how you could ladder a grouping of various time length CD's for your "safe money" that is going to be used for living expenses in retirement....right now.
I like this simple little article. Achieving Financial Independence: A Path to Freedom & Security https://assets.realclear.com/files/2023/09/2264_77505224-00e7-4f3a-b1e1-bb336d392f1d.pdf (BOLD is my opinion OR what I consider important content) "Everyone is searching for financial independence, but what does that really mean? For some, financial independence means jet setting around the world and buying expensive cars. For others, financial independence is being able to live your life without worrying about running out of money before you run out of breath. Whatever your perspective, the path to financial independence may not be an easy one, but it is also not impossible. This journey requires discipline, a long-term perspective, and a flexible plan that can weather any storm. Tips for Becoming Financially Independent Starting from the basics, there are several principles for achieving financial independence: • Develop a plan. Do you know how much you need to live the life you desire? As Lewis Carroll said, “If you don’t know where you are going, any road will get you there.” This plan and your objectives will change over time, so make sure to update your plan periodically. • Pay yourself first. My experience is that most individuals spend more money as they make more money. They buy more expensive cars, they buy bigger and more expensive homes, etc. If you can pay yourself first and save what you need to potentially be on track for financial independence by a specific age, then this gives you the freedom to spend without worry. • Invest your long-term funds in a portfolio designed to achieve the highest possible return commensurate with the level of downward volatility you are willing to endure. These steps might look simple and easy to achieve. However, they are constantly hindered by a variety of obstacles. Here are some tricks and strategies that can help you start your journey toward financial freedom. Fight the Desire for Immediate Gratification In today’s world of streaming services and same-day delivery, one of the biggest distractions in achieving financial independence is our need for immediate gratification. We all have wants and desires, and those can sometimes cloud our judgement and force us to trade rewards down the road for immediate satisfaction. However, committing to deferred gratification is a big part of the financial independence process. And we know this isn’t an easy decision. So, next time you’re contemplating a big purchase, ask yourself these three questions: • Do I really need this? • Is this going to follow the goals that I have? • Does it lead to compounding expenditure? Remember That Time Is Money How you spend your time and money needs to be connected to your highest values. Let’s say you earn a salary of $100,000 a year. You love to fish and decide to buy a new fishing boat that costs $50,000—or half your yearly salary. Let’s also say that you value spending time with your young kids more highly than you do fishing. Especially if your kids are not into fishing, buying a $50,000 boat may be a mismatch between your spending and values. Making more intentional spending decisions is a way to have more control over your life, money, and time. Set Up or Add to an Emergency Fund Financial independence also means having a financial “cushion” around your savings, investments, and wealth in the event of a serious illness or injury, unexpected car or home repairs, and more. It can also provide peace of mind and freedom to offer help or give gifts to your loved ones without crunching your own survival resources. Always consider accumulating an additional cash reserve equivalent to six months to a year of your living expenses. And since it will be used in an emergency, make sure this fund is liquid and can be easily accessed. Determine Your Net Savings Rate—And Revise as Necessary After taxes and expenses, what percentage of your income can you afford to put away in savings or invest toward your retirement? That number is your net savings rate, and the higher it is, the better you’ll be off down the road. Additionally, it’s a good idea to increase your net savings rate as you continue to earn more money throughout the year. For example, if you earn $100,000 a year after taxes, and you save 10% of it, you will have savings worth $10,000 a year. Next year, your after-tax income increases to $105,000, but your expenses don’t increase, and you continue to save only 10%, leading to a savings of $10,500. You’re still saving more than you did the previous year, but because your expenses didn’t increase, you have some wiggle room to adjust your net savings rate to something closer to 15%." MY COMMENT Sounds so simple as usual......but to achieve the things listed above requires DISCIPLINE and FOCUS. Both of these traits are very difficult for us humans.
The early market today. Stocks slip as Wall Street weighs fresh GDP data https://finance.yahoo.com/news/stoc...p-data-stock-market-news-today-112137750.html (BOLD is my opinion OR what I consider important content) "Wall Street stocks slipped on Thursday, struggling to shake off the downbeat mood hanging over markets as investors assessed fresh data on the US economy. The S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) traded about 0.1% lower just after the open. But the tech-heavy Nasdaq Composite (^IXIC) dropped 0.3%. With the question of whether the Fed can nail a "soft landing" for the economy still a key debate, a fresh estimate for second-quarter GDP came in unchanged at 2.1%. Official figures showed jobless claims last week rose to 204,000, compared with 215,000 expected. Investors will watch for an update on pending home sales due later. The Federal Reserve's message that rates will remain higher for longer has rattled markets, though stocks are showing some resilience after several days of steep losses. In bonds, the rapid rise in the 10-year Treasury yield (^TNX) continued as it topped 4.6%, trading at levels not seen in over 15 years. Both markets are under pressure from the surge in the price of oil, which hit fresh 2023 highs on Wednesday and is up over 35% since the end of June. That seen as likely to drive up fuel prices, posing a challenge to the Fed's efforts to cool inflation — and in turn to the chances of a rate cut. Oil prices turned lower on Thursday, as West Texas Intermediate futures (CL=F) fell to $92.93 a barrel after topping $95 earlier in the morning. Brent crude futures (BZ=F) were lower at $95.91, having neared $97 in the session. Friday brings the week's data highlight, the reading on PCE inflation, the Fed's preferred gauge. However, some believe it won't be persistent price increases that prompt central bankers to act, but insatiable American shoppers and an economy that stays too hot. In individual stocks, shares of Micron (MU) fell in premarket trading after the chipmaker said its first-quarter loss would be wider than previously forecast." MY COMMENT As usual....I dont see anything above that is new or shocking. Investors need to relax and quit obsessing over the short term and events like the above. This sort of day to day "stuff" is simply NOT relevant. I have been watching the markets as I read since the open.....and....the markets are doing just fine at this moment
I find this interesting......and....an example of the good marketing and product selection by Costco. Also some thinking outside the box here on the part of the company. Costco says its 1-ounce gold bars are real and have been selling out in hours https://finance.yahoo.com/news/costco-says-1-ounce-gold-224912291.html
Speaking of GDP. US Q2 GDP growth unrevised at 2.1%; weekly jobless claims edge higher https://www.reuters.com/markets/us/...weekly-jobless-claims-edge-higher-2023-09-28/ (BOLD is my opinion OR what I consider important content) "WASHINGTON, Sept 28 (Reuters) - The U.S. economy maintained a fairly strong pace of growth in the second quarter, the government confirmed on Thursday, and appears to have gathered momentum this quarter amid a resilient labor market. Gross domestic product increased at an unrevised 2.1% annualized rate last quarter, the Commerce Department said in its third estimate of GDP for the April-June period on Thursday. Economists polled by Reuters had expected GDP for the second quarter would be unrevised. Growth for the first quarter was revised up to a 2.2% rate from the previously reported 2.0% pace. The government also revised GDP data from 2017 to incorporate new source information and made some statistical improvements such as the treatment of regulated investment companies and real estate investment trusts. GDP was revised down in each of the first quarters of 2020, 2021 and 2022 mostly due to downgrades to consumer spending growth. But the Bureau of Economic Analysis (BEA), the agency that constructs the GDP report, said there was no evidence that residual seasonality, which plagued the GDP data several years ago, was an issue. The government also introduced new price measures, the personal consumption expenditures (PCE) price index excluding food, energy and housing, and PCE services excluding energy and housing, or the so-called super core inflation. Federal Reserve officials are focused on the super core price measure as they try to gauge progress in their fight against inflation. Since March 2022, the U.S. central bank has raised its benchmark overnight interest rate by 525 basis points to the current 5.25%-5.50% range. The economy is being underpinned by a resilient labor market, which is driving strong wage gains. Growth estimates for the July-September quarter are currently as high as a 4.9% rate. But a looming government shutdown amid bitter infighting among Republicans in the U.S. House of Representatives over spending could sap momentum in the fourth quarter. Hundreds of thousands of federal workers will be furloughed and a wide range of services, from financial oversight to medical research, will be suspended if Congress does not provide funding for the new fiscal year that starts Oct. 1. Also casting a shadow over the economy is an ongoing strike by the United Auto Workers union against General Motors (GM.N), Stellantis (STLAM.MI) and Ford Motor (F.N), which is expected to depress motor vehicle production and raise automobile prices. The strike, which started almost two weeks ago, is already having ripple effects on the supply chains. The labor market has continued to hold its own so far. A second report from the Labor Department on Thursday showed initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 204,000 for the week ended Sept. 23. Economists had forecast 215,000 claims for the latest week. Claims have been in the lower end of their 194,000-265,000 range this year. The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 12,000 to 1.670 million during the week ending Sept. 16, the claims report showed. The so-called continuing claims covered the period during which the government surveyed households for September's unemployment rate. Continuing claims were little changed between the August and September survey weeks. The unemployment rate increased to 3.8% in August from 3.5% in July." MY COMMENT YES....the economy is doing just fine....in spite of not because of......the FED. YES.....there will be no recession.....even though the recession talk has revived some lately in the media. Of course the government continues to screw with how all this economic stuff is calculated....so it is impossible to really compare data over time. I say this is intentional. Personally I dont consider a GDP of 2.1% as anything special. I would consider that rate as the bottom of the normal range which I would put at 2-4%.
You know, as I cruised through some of the financial news and regular news over the past week or so, I had a couple of thoughts. One...it further solidified my position on why I ignore most of it the majority of the time. Two...a funny little analogy came to mind. Our government (policymakers) often treat the economy and the taxpayer like their own little investment portfolio. They are horrible at managing it by the way, often committing the cardinal sins of investing. They believe they are smarter than everyone else. They tinker and inject themselves into everything. They simply over complicate the obvious. They always have the need and desire to do something....even when there is no need. They make decisions based on emotions most of the time. They blow money on things that "others" have convinced them are surely the better deal. Lastly, they vastly underperform based on their own belief that they are superior to the average person and they "know" what is "better" for everyone else. We simply would fire any financial manager such as this.
I have been off reading and flitting around the internet. Now I come back to the markets and see that we have taken a nice jump UP. Perhaps the markets are starting to get all wound up for post-September. Clearly......the markets dont need my help today. All I ask is.... SHOW ME THE MONEY.
