The Long Term Investor

I should say so.

Inflation is higher than the Fed wants. The problem could be its target.

https://finance.yahoo.com/news/infl...he-problem-could-be-its-target-185535285.html

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

"With a singular focus the Federal Reserve has struggled to pull inflation down to its 2% target. By its own forecasts, US central bankers won’t complete the mission until 2026. The dedication to a years long journey has cemented the idea that rates will stay higher for longer or that even more drastic rate hikes — and possibly a recession — will be required to achieve an elusive 2%.

While reaching that goal has long been entrenched in the Fed’s mission and public commitments, the costs of doing so have invited some calls to aim for a more realistic goal, fit for the current moment: raising the inflation target.

The main argument for upping the desired rate boils down to the difficulty in trying to get down to 2%. Fed officials would have to knock the economy so forcefully, the thinking goes, they would likely spark a recession to get there — as stubborn winds blow in the face of its inflation fight.

But central bankers have resisted such calls, with one Fed official even saying the implications could be disastrous.

Formalized more than a decade ago, the 2% target has become entwined with the Fed’s mandate to ensure price stability. It’s a Goldilocks number that’s palatable enough for consumers and businesses but not low enough to trigger deflation.

But the number itself is more a convention than economic canon.

“The Fed wants to be sure that there isn't too much inflation, which makes it tough for consumers to live their lives and pay their bills, but the Fed also doesn't want deflation, where prices are declining, because deflation can slow the economy,” said Jason Betz, a private wealth adviser at Ameriprise Financial. “The 2% target is the sweet spot level for the Fed.”

Stash Graham, managing director at Graham Capital Wealth Management, said the primary criticism of the inflation goal is that 2% is a long-term target that might not be realistic for the near-term time horizon. While rate hikes have cooled demand in many areas of the economy, supply-related shocks that are beyond the control of the central bank are reverberating. From the escalating violence in Gaza, which could trigger a broader conflict, to ongoing labor strikes, there’s a host of issues that could prevent the Fed from reaching its target.

Market observers who have argued for the Fed to tweak its target contend that a goal higher than the current 2% would give the central bank more flexibility. With added breathing room the Fed wouldn't have to keep raising rates or keep them as high for longer. And the economic pain that comes with rate hikes — from job losses to more expensive household borrowing to sluggish growth — wouldn’t be as acute.

Jason Furman, an economics professor at Harvard who served as a top economist in the Obama administration, argued in a recent op-ed that the Fed should move to a higher target range when it updates its overall strategy around 2025.

But Fed officials have long pushed back on moving the goalpost. When the question was posed directly to Chair Powell last year, he offered a resounding dismissal.

"We're not considering that. We're not going to consider that. Under any circumstances," he said in December.

Testifying in front of the Senate Banking Committee in March, he elaborated on staying firm. "We think it's really important that we do stick to a 2% inflation target and not consider changing it," Powell told lawmakers. “The modern belief is that people's expectations about inflation actually have a real effect on inflation. If you expect inflation to go up 5% then it will," he said.

Powell’s remarks highlight a credibility problem of altering the inflation target. A change risks unsettling expectations about future price increases, which influences the actual rate of inflation.

“They already cost themselves credibility by trying to convince us that inflation was transitory,” said Russell Hackmann, president of Hackmann Wealth Partners LLC. Changing the inflation target all of a sudden, he said, would be akin to “the kid who grades his own homework.”

But a big-picture review of the Fed’s inflation goal is still a possibility, as even Powell has acknowledged. “There may be a longer-run project at some point,” he has said.

Other critics of the powerful role of central banks have pushed for a bigger overhaul, questioning the heavy reliance on what they see as an imprecise lever of roundabout rate setting.

Joshua Ryan-Collins, an economics professor at UCL’s Institute for Innovation and Public Purpose, said the paradigm of prior decades worked in an environment of low inflation and stable growth. But the disruptions unleashed by COVID and by the Russian invasion of Ukraine have shown that model is not sustainable. “If central banks really want to deal with modern-day inflation they have to rethink their approach on the drivers of inflation and worry less about the short-term demand side,” he said. "The bigger issue is supply-side inflationary shocks, which are going to keep coming and going to get worse.”"

MY COMMENT

This insane inflation target is simply IDIOTIC. It has zero basis in history or fact and is totally at odds with what has been considered "normal" inflation of 3-4% in the past. This is simply a "made-up number".

The fact that they cling to this illusion of what is normal for inflation simply shows that these people are out of touch with reality.

 

I like this little article......short term.

Surging bond yields are the stock market's biggest problem right now

https://finance.yahoo.com/news/surg...kets-biggest-problem-right-now-100022916.html

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

"Treasury yields continued their march higher on Wednesday, with the 10-year Treasury reaching 4.9% for the first time since 2007 in a move that sent stocks lower.

And while market history suggests stocks should rally into year-end, the continued sell-off in bonds is threatening to destabilize what's so far been a strong year for equity markets.

As investors sell bonds, prices fall and yields rise. And as this year's sell-off in the bond market deepens, the approach towards a big, round number like 5% for the 10-year yields can serve as a psychological magnet for investors, much the same way Dow 30,000 offered a gravitational pull for investors back in 2020.

But it's not so much the absolute level that shakes markets as it is the speed of the change in prices and rates.

That's because bonds are expected to be the boring, stable part of a portfolio that doesn't move much. After all, Treasury bills, notes, and bonds are considered "risk free."

Except a lack of worry the US government will pay you back isn't the same as expecting the value of these securities to hold steady over time. A lesson investors are relearning during the Federal Reserve's rate-hiking cycle.

Moreover, this move in the Treasury market comes as the stock market's rally remains hyper-focused on a few key stocks known now as the "Magnificent Seven."

In a note on Wednesday, Torsten Sløk, chief economist at Apollo, noted the price-to-earnings (P/E) ratio for the S&P 493 — which excludes Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) — has been steady at around 19 all year. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)

For this smaller group of stocks, however, their collective P/E has risen more than 50%, to 45 from 29. In other words, investors aren't actually more excited about the prospects for most companies, just for a few.

"What is particularly remarkable is that the ongoing overvaluation of tech stocks has happened during a year when long-term interest rates have increased significantly," Sløk wrote. "Remember, tech companies have cash flows far out in the future, which should be more negatively impacted by increases in the discount rate."

Now, expectations for the cash flows of this "Magnificent" group in the future may be lofty, but these companies throw off huge sums of cash today as well. Still, in Sløk's view, this rally led by tech companies is "inconsistent" with the rise we've seen in yields.

"In short, something has to give," Sløk continued. "Either stocks have to go down to be consistent with the current level of interest rates. Or long-term interest rates have to go down to be consistent with the current level of stock prices."

There are, of course, myriad other reasons stock prices and risk-taking in general could suffer in an environment of inflation uncertainty. Or benefit should the outlook grow more stable.

But the bottom line for investors is that the longer the rise in yields persists, the greater the chance that the Fed makes a policy error by not tightening enough or by tightening too much.

All of which increases the chance that the Fed breaks something — and just what that might be we'll only know in hindsight."

MY COMMENT

We have two things going on with bonds.

First the markets are being traded and legally manipulated by the professionals. Second.....all the little investors that were in the past convinced to have some bonds in their portfolio.....are bailing on those bonds as they discover that bonds do have capital risk. They are losing capital hand over fist.......as rates rise.

This is short term stuff......but with all the coverage it freaks people out.....and becomes self fulfilling. So be it.......and.....who cares.

 

A flat and directionless market to open today......we will just have to wait and see how the day goes.

 

Here is the day today.

Stocks reach for gains amid surging Treasury yields

https://finance.yahoo.com/news/stoc...yields-stock-market-news-today-110722466.html

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

"Stocks rose slightly above the flatline on Thursday, attempting to rebound from a sell-off as Treasury yields marched higher and investors awaited a speech by Federal Reserve Chair Jerome Powell.

The Dow Jones Industrial Average (^DJI) was just above the flat line, while the benchmark S&P 500 (^GSPC) popped 0.1%. The tech-heavy Nasdaq Composite (^IXIC) led the way up, rising 0.2%.

Treasury yields climbed for the fourth day in a row, keeping up the pressure on stocks, as investors kept a wary eye on developments in the Middle East conflict.

The benchmark 10-year yield (^TNX) closed in on reaching 5% for the first time in 16 years, while the 2-year yield — seen as a guide to interest-rate expectations — jumped to its highest since 2006 around 5.24%.

Powell's comments on Thursday will be scrutinized for signs the Fed intends to hike rates again this year, given the US economy is proving resilient. Given that, some strategists are questioning whether it's time for the central bank to raise its target for inflation.

Investors are also watching for any potential impact of elevated interest rates on corporate performance as third-quarter earnings season rolls on.

CEO Elon Musk said Wednesday he was worried that higher borrowing costs would prevent customers from affording Tesla's (TSLA) electric vehicles, speaking after the company's earnings missed estimates. Tesla shares fell almost 8% in early trading.

Meanwhile, Netflix (NFLX) shares jumped around 14% at the opening the bell, after the streamer posted a surge in subscriber numbers and said it will raise prices in the US.

Earnings results flooded in Thursday morning with American Airlines (AAL) shares rising as the company reported record third-quarter revenue and AT&T (T) stock popped as the company added more wireless subscribers than Wall Street had expected.

In economic data, weekly jobless claims hit their lowest levels sine January, as the US labor market continues to show strength."

MY COMMENT

Ok......the same old.....same old....continues. Nothing new here. YEP......the short term is a real bitch. That is why I simply ignore it and dont get caught up in this stuff.

 

If you like.....irrelevant and probably distorted economic news....here you go.

U.S. weekly jobless claims total 198,000, fewer than expected

https://www.cnbc.com/2023/10/19/us-weekly-jobless-claims-total-198000-less-than-expected.html

September home sales drop to the lowest level since the foreclosure crisis

https://www.cnbc.com/2023/10/19/sep...owest-level-since-the-foreclosure-crisis.html

 

Not seeing much about earnings in general....but I did see this from a couple of days ago.

Earnings season off to strong start despite 'uncertain macro' environment ahead

https://finance.yahoo.com/news/earn...ertain-macro-environment-ahead-202508838.html

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

'The predictions for an end to the earnings recession have passed their first test.

Of the 32 S&P 500 companies that have so far reported earnings, they are beating Wall Street's expectations by an average of 9% on earnings per share, according to Bank of America Research's equity strategy team. In aggregate, after two quarters of declines, EPS for S&P 500 companies is up 1% compared to the same quarter last year in a sign that corporate America's earnings recession may be over.

In a research note Monday, RBC Capital's head of US equity strategy Lori Calvasina described the start of earnings season as "solid" despite "macro headwinds."

And, importantly, despite challenges such as sticky inflation and a higher for longer stance from the Federal Reserve, RBC raised its S&P 500 EPS forecast.RBC's latest accounting for recent macro movements pushed their projections higher, with S&P 500 earnings up to $223 (from $220) in 2023 and $232 (from $229) in 2024.

But while the estimate boost for Q3 earnings could imply a more glossy outlook for the index,Calvasina's S&P 500 price target for 2023 remains unchanged at 4,250, as the strategists note S&P 500 EPS is just one of several things that drive their calls.

When zooming out beyond just earnings, Calvasina still finds the macro picture to be choppy.

"Our review of S&P 500 earnings call transcripts since late September suggests the macro is taking a toll," Calvasina wrote. "Companies continue to emphasize the resiliency of a consumer who has become more selective in their spending. We are also reading about how macro uncertainty, including inflation and interest rate policy, are impacting demand and spending, though this is more on the corporate side. Pricing commentary remains mixed, with a fair amount of emphasis on how it’s moderating."

Throughout the early part of earnings season, though, the numbers companies report are appearing to drive stock action rather than the headwinds they may be commenting on.

Perhaps no earnings release was a clearer example of this than JPMorgan's (JPM). The head of America's leading financial institution had a grim view on the geopolitical tensions in the Middle East.

"This may be the most dangerous time the world has seen in decades," JPMorgan chairman and CEO Jamie Dimon said in the company's earnings release.

But despite the characterization, JPMorgan investors seemed more focused on another blowout quarter for profits as the stock rose more than 1.5% on Friday.

The same could be said for the S&P 500, which is up nearly 1% since Pepsi reported strong results on Oct. 10."

MY COMMENT

Sounds good to me. I also like the little earnings media blackout....that seems to be happening.

 

I will mention the single stock that i would buy right now if I had a chunk of money.....HD. They are nearing a correction...being down around 9%....year to date.

Here is one take on the stock.

Is Home Depot Stock a Screaming Buy on the Dip?

https://www.fool.com/investing/2023/10/18/is-home-depot-stock-a-screaming-buy-on-the-dip/

This company has clear dominance in the hardware and home repair niche. I own it and have no issues with the company....I will gladly continue to own it for the long term.

Does that mean YOU should own it......NO. Look at it if you wish....but make your own decision

 

Thee short term is very opaque.

At this moment we have a market that is simply......for the most part......being ignored. Most of the financial media is caught up in stories that have little to nothing to do with actual investing.....especially long term ingesting.

The top stories....government actions.....the Middle East....short term interest rates......FED speculation....etc, etc, etc. So little to nothing that has anything to do with longer term investing in actual companies.

In general it is impossible to find earnings results. A few specific companies are covered each day....but in a very skimpy manor. No one in the media is willing to spend any short term time discussing earnings.

So....this is one of those time periods where investors are left swinging in the wind. People that are subject to being influenced by the short term drama are flailing around. Others that are long term are simply ignoring it all. The result is a very ignorant and distorted short term environment.

We seem to be in a time period of investor disinterest in fundamentals. Is this the start of a new reality? I have no idea.....I hope not. If so....... that will mean that most people are disconnected from specific company results......and....REALITY.

 

Today seems like peak negativity to me.

We have had to sit through the FED comments, negativity from Elon Musk, the NVDA government/China downer, and the Ten Year being just a hair below 5%.

We will simply move forward from here and if we get a little luck we will move onward and upward......now that most of this "stuff" is either behind us or now expected.

We have two more FED meeting to get through......the next one in early November and the one in mid December. It is time for investors to quit giving the FED power. They really have no power.....unless we allow them to. There is....in reality....very little that they can do at this point.

I sit and do nothing as I wait for the next explosive rally....which will no doubt.....happen when it is least expected.

AND.... continue to be fully invested for the long term as usual.

 

I just looked at my account for the first time today. I expected to see a big loss. BUT.....my loss was very mild considering the markets today. I only have one stock up.....MSFT......but, the others are not significant losses. At this moment I am handily outperforming the SP500.

A lesson for me in expectations.....versus reality......in a good way today.

You know....it is easy to get all caught up in the current negative headlines, drama, and thinking. All is lost.....we are doomed to a negative end to the year. The markets are on the way down. Blah, blah, blah.

BUT......when I just calculated my entire portfolio year to date.....I am at....+28.88%. If that Is a BUMMER I will take it every year all year long.

Today is a good eyeopener for anyone........ to ignore the short term drama and fear mongering and focus on the longer term. The REALITY is.....things are much better for most investors right now than all the media and headlines say.

I dont know if I will add more gain or go down some before year end.....but if I stay about where I am right now, till year end....+28.88%.....it will be an EPIC year for my account.

 

I suspect that what we are seeing right now and perhaps till the November FED meeting in a week of so......is the storm before the calm.

Longer term investors need to stay BRAVE and not end up....snatching defeat from the jaws of victory......based on a bunch of media negativity.

 

Here is a feel good story......LOL.

IRS releases federal income tax brackets for 2023

https://www.oregonlive.com/business/2023/10/irs-releases-federal-income-tax-brackets-for-2023.html

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

"The IRS has released tax brackets and standard deductions for 2023 and, like most things, inflation is having an impact on the numbers.

Tax brackets are the figures used to determine how much you can expect to pay in taxes each year for each portion of your “taxable income,” calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income, or AGI. According to Forbes, the 2023 tax brackets have upper limits 7% higher than the brackets used for 2022 returns.

According to Nerd Wallet, the U.S. federal tax rates will remain the same until 2025 as a result of the Tax Cuts and Jobs Act of 2017, but the income thresholds that are used to set the tax brackets are adjusted each year based on inflation. You can see more on the brackets here.

The brackets will be used when filing in 2024.

For those married filing jointly, marginal tax brackets for tax year 2023 are:

• $22,000 or less in taxable income – 10% of taxable income
• $22,001 to $89,450 in taxable income – $2,200 plus 12% over $22,000
• $89,451-$190,750 in taxable income - $10,294 plus 22% over $89,450
• $190,751-$364,200 in taxable income – $32,580 plus 24% over $190,750
• $364,201 to $462,500 in taxable income –$74,208 plus 32% over $364,200
• $462,501 to $693,759 in taxable income – $105,664 plus 35% over $462,500
• $693,751 or more in taxable income – $186,601 plus 37% over $693,750

Marginal tax brackets for tax year 2023 for single individuals

• $11,000 or less in taxable income – 10% of taxable income
• $11,001 to $44,725 in taxable income – $1,100 plus 12% over $11,000
• $44,726 to $95,375 in taxable income – $5,147 plus 22% over $44,725
• $95,376 to $182,100 in taxable income – $16,290 plus 24% over $95,375
• $182,101 to $231,250 in taxable income – $37,104 plus 32% over $182,100
• $231,251 to $578,125 in taxable income – $52,832 plus 35% over $231,250
• $578,126 or more in taxable income - $174,238 plus 37% over $578,125

The standard deduction, or the specific dollar amount that reduces the amount of income on which you’re taxed, has also increased.

For married couples filing jointly, the new amount is $27,700 up from $25,900 last year. Single filers can claim $13,850, up from $12,950 in 2022."

MY COMMENT

Very good news for most people. A little side benefit of inflation.

 

By the time we closed today it was a fairly mild and meaningless loss for me today. Even though I was down I still had a couple of companies UP today.....MSFT and AMZN. Best of all.....I managed to beat the SP500 by 0.59% today.

TGIF......is the markets tomorrow....now that today is done and over with.

COURAGE.

 

I expect this is what will be pushed onto the short term markets tomorrow.

10-year Treasury yield rises to 5%, the highest level for the key rate in 16 years

https://www.cnbc.com/2023/10/19/us-treasurys-ahead-of-fed-chair-powell-speech.html

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


"The benchmark 10-year Treasury yield rose on Thursday, hitting a 16-year high as investors pored over remarks from Federal Reserve Chairman Jerome Powell.

The yield on the 10-year Treasury crossed 5% for the first time since July 20, 2007 when it yielded as high as 5.029%. The benchmark rate has climbed for four days in a row, bringing October gains to about 40 basis points.


The 2-year Treasury yield fell 6 basis point to 5.16%, after hovering at levels last seen in 2006 earlier in the session. Yields and prices have an inverted relationship and one basis point equals 0.01%.

The moves in the bond market came after Powell signaled that monetary policy was not yet too restrictive.

“Does it feel like policy is too tight right now? I would have to say no,” Powell said at the Economic Club of New York.

The Fed Chair acknowledged recent signs of cooling inflation, but said that the initial easing in prices was not enough yet to determine a trend.

“Inflation is still too high, and a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal,” said Powell in prepared remarks. “We cannot yet know how long these lower readings will persist, or where inflation will settle over coming quarters.”

Powell hinted the labor market and economic growth may need to slow to ultimately achieve the Fed’s goal.

“Still, the record suggests that a sustainable return to our 2 percent inflation goal is likely to require a period of below-trend growth and some further softening in labor market conditions,” Powell said.

Bond yields have been rising as of late and strategists attributed the action to a few factors: Concern that the Fed will keep benchmark rates high to fight inflation; an economy and labor market that consistently outperform expectations; swelling government deficits requiring more supply to hit the market as the Fed has pulled back as a buyer; and the increase in the so-called term premium, which is the extra yield investors demand as they worry that rates could change over the term they have to hold the bond.

A New York Fed calculation indicates that the term premium is around its highest level since May 2021.

On the data front, initial filings for unemployment benefits dipped last week, indicating that the U.S. labor market remains tight. Weekly jobless claims totaled 198,000 for the period ending Oct. 14, below the Dow Jones estimate for 210,000."

MY COMMENT

As usual the FED continues to trash the stock markets at every turn. Most....if not all....their constant commentary is directly aimed at stock markets and stock investors.

If they really cared about the economy and inflation they would be emphasizing the......government spending, regulations, and policy....... that is mostly the cause of continued inflation. Of course...they will never do that.

 

Another day....another flat news driven open today. The constant and relentless media and professional investor negativity continues.

I am tired of it and I bet most investors are tired of it. Not the flat markets.....that is just the normal variation that we see with markets over the short term......but, the constant negativity.

Most of the negative drama is not major or long term issues.....but day after day it is pushed center stage. It is the modern media doing this. They dont care if anything is correct, accurate, or legitimate.

In a way it reminds me of the media coverage of the hospital bombing lately. I am not getting into the politics of the issue....but....it is clear that the initial media coverage was simply wrong......and....never vetted.

The New York times ran a front page photo of a demolished building claiming that it was the hospital....yet....it was not. They have never issued a retraction. Any simple attempt to verify the accuracy of this photo would have quickly shown that it was not the hospital. This is where we are with so called....."news"...reporting at this moment.

NO....I dont expect that this "stuff" will get any better. So it is critical for investors to simply ignore it all......the good, the bad,..... everything. When no one can trust the media....no matter what side of any issue you are on.....it has devolved into simply....propaganda.

Unfortunately....this is where we now are in the investing world. Things in much of the media that drives the markets each day is simply....propaganda.

 

I like this little article......or sometimes....you need to be careful what you wish for.

Bad Returns in the Market Aren’t Always Bad

https://awealthofcommonsense.com/2023/10/bad-returns-in-the-market-arent-always-bad/

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

"A reader asks:

I began investing in an S&P 500 index fund in the summer of 2021. Is that unfortunate, good or bad timing?

From 1928-2022, the S&P 500 achieved annual returns of 9.6% per year.

We all know the stock market doesn’t simply offer returns year in and year out in the 9-10% range. Stock market returns in a given year are anything but average.

In fact, the average return in an up year going back to 1928 is a gain of a little less than 21%. The average loss in a down year is a loss of just under 14%.

The stock market in this time has been positive in roughly 3 out of every four years.

To keep things simple, let’s use +20% for the up years and -15% for the down years since I like nice round numbers.

If the stock market earned returns of +20%, +20%, +20% and -15% the annualized return would be +10% per year.

Still with me?

Obviously, you don’t three years of gains and then one year of losses and there is a wide range around those +20% and -15% averages. But these numbers can be instructive when it comes to thinking about the lifecycle of investing, especially when you’re young and just starting out on your investing journey.

Let’s say you save $1,000 a year for the next 40 years. We’ll use our same gain and loss averages along with the probability that stocks will be up three out of every four years, meaning you get ten down years and 30 up years.

Now let’s look at two different scenarios:

Scenario A: You get -15% annual losses in the first ten years followed by 30 years of +20% annual gains.

Scenario B: You get 30 years of +20% annual gains followed by ten years of -15% annual losses.

As a person who is saving periodically which scenario should you choose?

In Scenario A, where your returns were dreadful in the first ten years but wonderful in the ensuing 30 years your final balance after 40 years would be $2.5 million.

In Scenario B, where your returns were wonderful in the first 30 years but dreadful in the final 10 years your final balance after 40 years would be just over $200,000.

In each scenario, the market’s average annual return is 10% but the results are miles apart. How can this be possible?

In Scenario A, you’re saving and investing in your most important compounding years during a brutal bear market.

In Scenario B, you’re saving and investing in your most important years during a rip-roaring bull market.

Obviously, these examples are not realistic. If the stock market fell 15% for 10 straight years, that’s a loss of 80%. Gaining 20% for 30 straight years would give you a return of nearly 24,000%.

The idea here is that you should want poor returns early on in your investing lifecycle assuming you are a periodic saver over time (most of us are). You shouldn’t be cheering for all-time highs ever day. You should get on your hands and knees and pray for corrections, bear market and market crashes.

Since August of 2021, the U.S. stock market has essentially gone nowhere, falling roughly 2% in total:


If you’ve been diligently investing into the stock market on a regular basis in this time you’ve had the ability to slowly but surely build up a position. Some prices have been higher, some lower but the fact that stocks have gone nowhere is a good thing for those of us who are net savers.

Down markets allow you to buy more shares at lower prices, higher dividend yields and lower valuations.

If you are just starting out as an investor the best thing that could happen to you is a series of down markets. I can’t promise the stock market will have a similar risk-return profile going forward.

The stock market does not always cooperate and give you what you need but this is the mindset you should take when thinking about building wealth over time.

Poor returns aren’t always a bad thing as long as they lead to better returns down the road."

MY COMMENT

In investing there really is no....good or bad......especially short term. If you have long term focus and are a long term saver of your funds....you will probably do just fine. Somehow it will all work out.....in spite of all the breathless negativity that you will see through your lifetime of investing.

One thing is clear....you have to be in the markets to get the gains. Too much focus on the day to day FEAR.....and many people will never be in the markets.

Most....of the negative news items really have no power over stocks or investors. BUT....we allow them to have power and we give them power. Much of this is happening with news driven AI Program trading that creates a short term self fulfilling prophesy.

I dont know about any one else....but....I simply REFUSE to believe most of what I see being spouted daily. I refuse to give the negativity power over my investing or behavior.

 

Yep......guess why.

Even strong earnings might not be able to save stocks

https://finance.yahoo.com/news/even-strong-earnings-might-not-be-able-to-save-stocks-093000833.html

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

"Companies are reporting earnings beats on both the top and bottom lines thus far in the third quarter. But it isn't helping the stock market.

All three of the major indexes closed lower on Thursday. Stocks took a noticeable shift downward after Federal Reserve Chair Jerome Powell indicated the central bank was doubling down on the Fed's "higher for longer" stance, sending bond yields to their highs of the day.

The move was emblematic of the market over the past several weeks, which has been almost entirely driven by the "pain trade" in bonds.

Evercore ISI senior managing director Julian Emanuel believed that earnings could be one of the catalysts for stocks to trade higher. But bond yields have pressed even higher, conflict in the Middle East has intensified, and the Republican Party still hasn't decided on a speaker of the House.

"A tilt toward defensive strategies is becoming necessary," Emanuel wrote in a new note to clients on Thursday.

Prior to earnings, Emanuel had written that themes like artificial intelligence could benefit companies on the micro level. And, in some cases, individual beats have been rewarded handsomely (see Netflix rising more than 16% Thursday on its price hikes and subscriber beat). But overall, the CBOE Volatility Index (^VIX), Wall Street's favorite gauge for fear and volatility, is hovering near its highest levels in six months. And that has Emanuel concerned.

In Emanuel's view, the VIX trading near 20 puts the index in a position to be "micro-driven" by things like AI and other investment themes. At 21, a level the index rose above on Thursday, Emanuel says market volatility becomes more driven by macro factors.

"Geopolitical risk (Include Ukraine/Russia and China) is arguably as high as it has been at any time, except 9/11, since before the 1989 Fall of the Berlin Wall," Emanuel wrote.

While earnings can drive individual stocks, the broader market story hasn't changed.

Treasury yields remain volatile, while the unknowns around the US economy's trajectory, a boiling geopolitical feud in the Middle East, and lack of direction in Washington aren't going away. Put together, the confluence of pressures isn't a good recipe for markets that typically hate uncertainty.

Investors believe volatility in the bond market will end eventually, but a clearer picture of the Fed's path forward must come first. Throughout a more than 30-minute speech and discussion on Thursday, Powell didn't spell out if the Fed would hike once more or not.

"There wasn't a clear message because he hedged his bets at every turn," Kevin Nicholson, RiverFront Global Fixed Income chief investment officer, told Yahoo Finance Live on Thursday.

And until that narrative changes, the market regime doesn't appear to be shifting either, even if earnings are beating expectations."

MY COMMENT

Why might the good earnings not matter? Because there is a news blackout on earnings going on right now. It might be intentional or it might be unintentional....but it is happening.

ALL the commentary and opinion on the markets is directed elsewhere at the negative stories. So we are in a "tree falls in the woods" situation.....if good earnings happen, but they are not commented on.....did they really happen?

Of course they did happen.....but any short term impact that would normally happen is muted. They will hopefully be money in the bank for later.

I noticed leading up to this earnings period that there was nothing being said about upcoming earnings. No predictions from the experts....nothing. They have been wrong and so embarrassed so many times over the past four years that apparently they simply decided to ignore earnings this time around. They are all off chasing after other rabbits......and pretending....earnings, what earnings?

This is simply....hanging the markets and investors out to dry.

 

So what to do?

Well in this sort of a situation...you have to do more of what works.....become even more focused on the long term. You have to..... TRUST...... that the long term will provide the protection that investors need from the short term INSANITY.

I actually believe we are still seeing disrupted and distorted investor, and day to day life, psychology as a result of the pandemic and economic shut-down. We have generally recovered from most of the economic impact of those distortions and disruptions....but on a personal and HUMAN level.....the pandemic and shutdown is still a significant factor in current human behavior.