The equity markets keep churning higher in spite of…..

Here’s a partial list, for the faint of heart, of the worries and concerns that have beset individual investors over the last nine years.

Every one of these things were billed by the financial news guys on cable television as “the beginning of the end of the world.”

But we’re still here, and equities are still inching upward.  Will they always?

No, there will be a correction – even corrections.  But the end of the world is a counter-productive idea to invest in.  It’s like living, when there’s nothing wrong with me, as if I will die this week.  And living that way every week. Of course, it’s possible that I will die this week. But living with such negativity, when there is no overt reason for it, is an awful way to live.

And it’s an awful way to invest, too.

Investing that way is like those who think like the chart below.

Think about it.

Have a good summer.  Enjoy the gifts you have been given.  Live with gratitude and hope.  Be a blessing to someone today and every day.

God bless you, my friend.

Posted in economic recovery, fear, investment myths, investment wisdom, market corrections, Market falls, market volatility, Personal Finance, retirement investing, saving, stock rallies, Successful living, The Great Recession | Leave a comment

Some charts to tell us where we are – or may be – in the investment cycle.

I read often these days that the market for us long term,, retirement investors is about to roll over and die, taking much of our gains with it?

Is that true?

I don’t think so, but then I don’t really know. I do know that the market seems to have a sufficient amount of worry to move higher on the ever-important wall of worry.  The scariest times, remember, are those when everyone, including the baggers at the grocery store and the guys in auto repair, are in the market and tallying up their gains.  That’s a moment when we should all run for the exits.

But that ain’t now.

Let’s look at a few charts to help us understand where we may be.

First, take a look at the indebtedness of individuals, an important index of people’s abilities to buy or manage things other than pay down debt.

That chart shows a lot of health of households, or at least management of their debt loads.  I wish I could say the same for the corporate sector and government, even if both of them make up, together, only about 30% of the economy.

Here’s a peek at the rising corporate debt loads.  Perhaps rising as steeply as it is because companies are loading up on debt while rates are still low. And borrowing is a lot less expensive than issuing new stock.

Then there’s government’s debt load, which is a problem even if, overall, government is maybe only 15% of the economy. I don’t have a very current chart for government, but suffice it to say, government’s debt load – state and federal – are not on diets. Here’s one image, a bit dated to help us see the magnitude of the debt load of the federal government.  I could understand the explosion in government debt to fight WWII, but more recent increases are to support a larger and larger welfare state.  What would we do if and when a real crisis comes along again?

Image result for image, chart of government debt

Next, I’ve used this one before to help us gauge the likelihood of the next recession, an event that typically tears stock markets up – and retirement savings.  The fact that the market has generally risen since March of 2009 is enough for some people today to say that its due for a fall.  I’d rather look at the data, and the data are not that encouraging to those who think our markets are about to tumble or are “cruising’ for a bruisin'”.  Here’s data from the St. Louis Federal Reserve, which I hope would lead a sensible investor to conclude that this bull market is still in place:

Then, take a look at Doug Short’s four key indicators of the likelihood of a recession coming down the tracks.  Right now, not one of his indicators in pointing in the wrong direction.  But a few months ago, some were – at least for a while.

So, in spite of the terrorist threats ranging around the world, and in spite of our government’s being tied up in knots, the business and investing worlds see opportunity and a lack of hostility from the government right now.

Things could be a lot worse.

God bless you.


Posted in economic recovery, fear, investment myths, investment wisdom, market corrections, Market falls, market volatility, news biases, Personal Finance, retirement investing, saving, stock rallies, Successful living | Leave a comment

How are the experts doing in their predictions?

Check this chart out, my friends:

If you carefully read the headline information, you probably see why I am sending this chart to you.

But just in case you want or need help, the chart tells us the outcomes of investment predictions made by 68 of the best-known investment forecasters.  These advisors’ accuracy is as high as 72% and as low at 17%; or in other words, from getting 7-out-of-10 predictions right to as few as under 2 out of 10.  Many of these people are fixtures on cable, financial news. Most have expensive subscription services you can subscribe to “help” you in your investing. These folks may or may not be accurate, but they are always confident.

Beware of experts.

So many of us are so full of self-doubt when it comes to investing that we turn, in our confusion, to those who seem to know what’s ahead, yours truly included.  But be careful.  No one knows the future, but God.  And He ain’t talking to us about this stuff.

All you need to know are a few basics:

Pursue a broadly-diversified, low-cost, equity-oriented mutual fund or ETF strategy.  Rebalance your holdings at least once a year.  Try not to think too much about this stuff.  And stay away from watching financial news unless you can view it largely as entertainment.

Posted in economic recovery, fear, investment myths, investment wisdom, Personal Finance, retirement investing, saving, stock rallies, Successful living | Leave a comment

Some brief thoughts, so far, and for what they are worth, on President Trump

Two observations for my readers, on Donald Trump that affect investor confidence.  And without confidence, investment dies.

Though he brings many of his problems on himself, never before has a new President faced such consistent, rabid opposition from the press. Again and again, the press is so intent on bringing this imperfect man down that they publish rumors as if fact.  They create fictitious news from “unnamed sources” or anonymous sources, treating it as if verified or good enough.  They create a sort of, what shall we all it?  Maybe, “fake news.”

Second, whether or not Trump’s important legislative agenda – think health care or tax reform – passes Congress or even gets an adequate hearing, President Trump has engendered, in the investor community at least, an imperfect but very palpable optimism.  Compared to the prior administration, businesses and investors can deploy capital.  They are not attacked as unpatriotic greedy monsters or demonized for their successes.  This is quite a refreshing change, and it encourages investment.

I’m sure a correction in the market is somewhere up ahead, but it does not seem to be on the near horizon.

Posted in economic recovery, investment wisdom, retirement investing, stock rallies, Successful living | 1 Comment

“Sell in May and go away?” Really?

You’ve heard the old Wall Street saw about “Sell in May and go away”?

Is that right?

Well, history tells us that not much in the way of positive returns are achieved from the first of May through the end of October.   Almost all returns appear to be clumped in the other six months of the year, from November through April.

But returns are still positive for May through October, and some years notably so.

Forget the technical banter in the chart below, just focus on the lines in the chart.  Blue tells us what a single dollar having been invested in just the months of May through Oct, from 1871 forward, has achieved.

Red tells us the same for the months of November through April, and Green tells us the combined value.

Stunning, isn’t it?

Starting with just a buck back in 1871, our imaginary investor would have accumulated about $400,000 today.  Sure, none of us has that long an investment horizon, nor does the chart account for inflation, taxes, or management fees.  But, come on, it’s whole lot better than a CD.

God bless you all.


Posted in economic recovery, investment myths, investment wisdom, Market falls, market volatility, retirement investing, saving, stock rallies, Successful living | Leave a comment