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    Markets "In a Nutshell" for November 13, 2018

    Nov 13, 2018

    Investment Week at a Glance

    Stocks enjoyed another up week as the Dow Jones Industrial average gained 2.8% while the S&P 500 was up 2.1%. The New York Stock Exchange Composite (2,000 stocks) rose 1.8%. The “average investor’s index” (Value Line index) gained 0.5%. Foreign stocks (DJ Global ex U.S.) dropped 0.4%. Bond yields dropped (bond prices up) as the 10 year Treasury ended at 3.18%. (Data sources: Barron’s Financial, Wall Street Journal)

     

    “Tune Out the Politics, Stick With the Stocks”

    The headline above comes from an 11/5 article by Jack Hough in Barron’s Financial. Hough outlines the case that regardless the arguments that the political parties may make, there is little evidence that specific outcomes of elections drive stock prices. Much more influential are the current states of corporate profits and the strength of the economy. We would add that regardless of election results, investors should focus on their particular investment and financial goals in selecting investment allocations. Factors such as risk appetites, stage of life expenses and years until retirement should be a more focal point for long term investors.

     

    Secrets of investing from an investment legend 

    Investment legend and billionaire Howard Marks has a new book out: Mastering the Market Cycle. Marks has spent his 50 year investment career with a focus on assessing timing of the market cycles. In a New York Times interview he said, “One of the best ways to have a handle on macrorisk, marketwide risk, is by understanding where we stand in a cycle. When the market is high in its cycle, it’s probably pretty risky. When it’s low, most of the time, it turns out that they were giving away money, if only you could figure that out at the time.” Read on…

     

    Investment Legends part II 

    Marks echoes the sentiments of another legendary investor John Templeton who said, “invest at the point of maximum pessimism.” However both Marks and Templeton also noted how difficult it was to get right the exact timing of the cycles and so to use the cycles as a guideline for taking risking up or down in a portfolio.  

     

    Quiz:

    According to thebalance.com when was the last year the U.S. ran a budget surplus instead of deficit? a. 1969 b. 2008 c. 1957 d. 2001...Answer is below…

     

    Have a good week!

     

     

     

     

     

    Answer to quiz:

    b. 2001