Markets "In a Nutshell" for September 18, 2018Sep 18, 2018
Investment Week at a Glance
Stocks were up last week. The Dow Jones Industrial average gained 0.9% while the S&P 500 was up 1.1%. The New York Stock Exchange Composite (2,000 stocks) gained 1.1%. The “average investor’s index” (Value Line index) was up 1.0% and foreign stocks (DJ Global ex U.S.) spiked up 1.4%. Bond yields were up as the 10 year Treasury ended 2.99%. (Data sources: Barron’s Financial, Wall Street Journal)
10 years after the Financial Crisis of 2008
It was 10 years ago this month that the Financial Crisis of 2008-09 hit full force as the U.S. banking system teetered on the brink in the wake of the housing collapse. The stock market dropped 40% during the crisis (and 56% during the 2007-09 bear market). So we are reading many articles lately about the Crisis. Barron’s cover story this week discusses how debt buildup was a root cause of the 2008 crisis. At the time there was much hand wringing and focus on how to contain debt buildups. Barron’s points out that in the past 10 years while the U.S. debt has doubled, there is scant attention being paid to the potential negative consequences of debt buildup. Read on…
Financial Crisis Part II
Long time investment gurus such as Jim Rogers warn that the reckless buildup of debt will cause another crisis and another decade of poor stock performance (like the 2000-2010 market). Others however don’t see the problem as a crisis until much farther down the road. One thing is for sure. At some point we as a country will need to deal with the $500 billion- $trillion annual deficits before it does cause a fiscal crisis.
No worries about stock market corrections?
A Yahoo Finance article discusses that the stock market’s recent recovery from its correction back in January points out that patient investors who ride out the ups and downs have been rewarded. In each of the 36 corrections since 1950 (a correction defined as a 10% or more stock decline), Yahoo points out that an ensuing bull market has erased the losses 100% of the time. “Put in another context, buy-and-hold investors are a perfect 36-for 36 since 1950.”
According to WTEx, what percent of the $421 billion of Canadian exports in 2017 was purchased by American consumers? a. 24% b. 40% c. 61% d. 75%...Answer is below…
Have a good week!
Answer to quiz: