Category: Weekly Investment Update

Stock indexes continued to hold above the recent correction’s lows last week as the first quarter earnings reports began to trickle in. The season will shift into higher gear this week as companies like Netflix, Bank of America, Bristol-Meyers Squib, Merck, Honeywell and Schlumberger report, not only their revenue and earnings for the quarter just […]

Market prices constantly adjust to new information. Later this week we will begin receiving new, meaningful information as first quarter corporate earnings begin to trickle in. Reporting will be in full swing next week and continue through the month. We will soon be able to update the “E” in P/E multiples. Expectations are for S&P […]

The S&P 500 began the year at 2,673.61 and from there continued its two-year rally to January 26th posting an all-time high close of 2,872.87. At that point, the index was up 57.07%, excluding dividends, from its February 11, 2016, close of 1,829.08. From the new high, stock prices became volatile as the index corrected […]

Last week, the Dow Jones Industrial Average failed to hold at its February 8, low close of 23,860.46, finishing the week at 23,533.20, down 11.6% from its high close of 26,616.71 on January 26. The broader S&P 500 fared slightly better finishing the week at 2,588.26, slightly above its early February low of 2,581.00 and […]

Last week, we wrote about analysts’ expectations for the economy for the next twelve to eighteen months. Inflation is expected to hold at 2.0% to 2.5% for the full year. The Federal Reserve’s well-advertised plan for short-term interest rates is to raise the Fed Fund rate (the rate at which financial institutions lend to one […]

In aggregate, buyers were more anxious than sellers last week. Fears of rapid acceleration in the rate of inflation temporarily faded. This likely reduced the fear of an immediate large increase in interest rates. With renewed expectations that the 10-Year Treasury yield will remain well under the 4% to 5% range, stocks again seemed the […]

There are few sources of enduring investment truths as dependable as Warren Buffett. Last week’s update pointed out the necessity of identifying the different risks associated with the varying time horizons a portfolio might have. The main point was, in a long term portfolio, the risk of the compounding loss of purchasing power as a […]

Why are there bonds in my portfolio? Over the weekend, Berkshire Hathaway released its 2017 annual report along with Warren Buffett’s annual letter to shareholders. One section of Mr. Buffett’s letter addressed the risk in owning bonds and has folks questioning diversification. Investing is an activity in which consumption today is foregone in an attempt […]

As of Friday, 80% of companies in the S&P 500 have reported fourth quarter 2017 results. The blended earnings growth rate for the quarter has been 15.2% year-over-year and is the highest reported since 2011. FactSet reports 2018 earnings per share growth estimates have increased by 7%. In addition, from Dec. 31 through Feb. 15, […]

Historically, 10% stock market pullbacks are annual occurrences. Aside from some interesting intraday fireworks due to automated trading and the implosion of various derivatives created to track market volatility, the last several weeks have not been unusual. The financial media, whose main incentive is to generate revenue from advertising dollars, wants readers and viewers to […]