Benjamin Graham, the well-known value investor, in The Intelligent Investor created Mr. Market as an analogy to describe how the stock market works. “Every day he tells you what he thinks your interest [in your business partnership with him] is worth and furthermore offers either to buy you out or to sell you an additional interest on that basis. Sometimes his idea of value appears plausible…
“The Dow Jones industrial average failed yet again last week to clear the magic 20,000 mark, but it will someday. Grant Webster, a portfolio manager with Dowling & Yahnke in San Diego, tells us how to invest in a record-level stock market.”
As you most certainly know by now, Donald Trump scored a stunning upset in the 2016 presidential race, defeating the favored Democratic nominee Hillary Clinton. For the second time in five months (the first being Brexit), global investors were caught flat-footed by the outcome of a major political election in which most media outlets and pundits had predicted the opposite result. As fear and uncertainty caused uneasiness for investors, U.S. stock market futures dropped significantly on election night. However, after Trump’s acceptance speech, U.S.
2016 began with a bang (in a bad way) — with the stock market falling in a hurry. In fact, it was the worst 10 day start to a calendar year in history. From the beginning of the year to January 15th, the U.S. stock market (as measured by the S&P 500 Index) had dropped over 8%. The S&P 500 hit its low for 2016 on February 11th, 6 closing at 1829.08, a decline in excess of 10.5% for the year.
At the tail end of what had been a relatively quiet quarter, global stock markets suffered a sharp two-day sell-off following the surprise vote on June 23rd by the United Kingdom to exit the European Union. Despite the dire predictions made immediately after the vote, the decline was short-lived. The major global indices rebounded to pre-Brexit levels or higher by the end of the quarter. In fact, the second quarter ended on a positive note for most asset classes.
Asset class returns for the quarter and year-to-date were as follows:
Following a strong finish to 2015, financial markets took investors on a harrowing ride during the first quarter of 2016. After losing 11% of its value in the first six weeks of the year (through February 11th), the S&P 500 Index reversed course and finished the quarter in positive territory. This volatility, which began affecting markets in the second half of 2015, can be attributed to numerous economic and geopolitical developments across both domestic and foreign markets. China's currency devaluation, falling oil prices, and uncertainty over the Federal Reserve's plan t
The stock market is the only market where things go on sale and all the customers run out of the store....
We are sharing this tweet, which takes a wry look at investor behavior, because it’s important to remember the impulse of investors to bolt when the stock market is struggling like it has since the start of 2016.
Are stocks looking more attractive now than they were about a year ago?
If you simply looked at the U.S. stock market’s five-year annualized performance ending on Dec. 31, it would be easy to assume that stocks have been on fire since the early days of 2009. On New Year’s Eve, the five-year annualized return of the broad U.S. stock market was a torrid 18.71%. A lot of investors will get excited about returns like that.
Does your investment portfolio generate returns that are higher than the stock and bond market averages? Don’t feel bad if the answer is no. Even financial professionals find it extremely difficult to produce better returns than the market averages on any sustained basis. In fact, the pros usually fall short even though they spend their working hours trying to outsmart the market.