Just as with many simplified strategies, the “Sell in May and go away” maxim often rings true.  But investors who follow this kind of advice could be setting themselves up for failure. Take this past May, for example. The market became more difficult as stocks began to slide. As of Friday, May 31, the Dow Jones Industrial Average, an index that measures the performance of blue-chip stocks, declined for the entire month, about 6.5% total. The broader market, as measured by the S&P 500 index, which set a record on April 30, declined by 6% or so as well.  And… Read More

Just as with many simplified strategies, the “Sell in May and go away” maxim often rings true.  But investors who follow this kind of advice could be setting themselves up for failure. Take this past May, for example. The market became more difficult as stocks began to slide. As of Friday, May 31, the Dow Jones Industrial Average, an index that measures the performance of blue-chip stocks, declined for the entire month, about 6.5% total. The broader market, as measured by the S&P 500 index, which set a record on April 30, declined by 6% or so as well.  And the CBOE Volatility Index, also known as the “fear index,” traded above the three-year average for nearly the entire month.  In all honesty, though, we’ve been spoiled.  While we are still in bull-market territory (notwithstanding the recent pullback, which has not broken the uptrend), investors are less accustomed to volatility, having had 11 years of a bull market without meaningful corrections. And the market still trades near its all-time highs, despite the headlines. That’s a good sign. Strength, after all, begets strength.  But the higher the market goes, the more it feels — to individual investors and to professionals –… Read More

If you stop to think about it, it’s fairly clear that many of us take our internet access for granted: We shop online… play online… listen to music online… and even date online. And these days, our refrigerators and toasters, not to mention smart TVs and entire staffs of virtual assistants (like Amazon’s Alexa), are connected to the internet as well. —Recommended Link— The Real Reason Most Americans Can’t Retire by 65 If you’re following traditional retirement advice that made sense 50 years ago… You may be missing out on the most effective retirement strategy… Read More

If you stop to think about it, it’s fairly clear that many of us take our internet access for granted: We shop online… play online… listen to music online… and even date online. And these days, our refrigerators and toasters, not to mention smart TVs and entire staffs of virtual assistants (like Amazon’s Alexa), are connected to the internet as well. —Recommended Link— The Real Reason Most Americans Can’t Retire by 65 If you’re following traditional retirement advice that made sense 50 years ago… You may be missing out on the most effective retirement strategy today. Here’s all you need to know to retire as early as this year. No wonder the need — as well as urgency — to secure our personal data and protect our privacy has grown more and more important in recent years. But the business of internet security extends beyond the need to protect our data. As an example of what I’m talking about, let’s go back in time to October 21, 2016. #-ad_banner-#On what seemed like just another fine October Friday, many of us suddenly realized that our favorite websites weren’t working. Whether you were… Read More

Investors often have a preference for “inexpensive” stocks.  No, this time I’m not talking about valuations. Rather, it’s the sheer price level that sometimes keeps investors away from an otherwise perfectly strong business and good investment opportunity.  Most investors prefer dealing in “round lots” of a stock — that is, share amounts that are measured in hundreds. This simplifies the order-filling and accounting processes. But it’s also a psychological thing… many investors see a triple-digit price for a stock and immediately assume it’s “expensive,” i.e. overvalued.  #-ad_banner-#Typically, a company does not set its initial public offering (IPO) price in hundreds… Read More

Investors often have a preference for “inexpensive” stocks.  No, this time I’m not talking about valuations. Rather, it’s the sheer price level that sometimes keeps investors away from an otherwise perfectly strong business and good investment opportunity.  Most investors prefer dealing in “round lots” of a stock — that is, share amounts that are measured in hundreds. This simplifies the order-filling and accounting processes. But it’s also a psychological thing… many investors see a triple-digit price for a stock and immediately assume it’s “expensive,” i.e. overvalued.  #-ad_banner-#Typically, a company does not set its initial public offering (IPO) price in hundreds of dollars — that would negatively impact the new shares’ overall liquidity and investors’ appetite. So whenever you see a stock trading in the triple digits per share it’s usually an indication of strength and how much investors like it.  Of course, not everything is so clear-cut (it would be too simplistic to measure a stock’s success by the dollar price of its shares). That’s because most companies, when their share prices rise to a certain level, execute a stock split to keep the nominal price from getting out of whack compared with similar companies, and to keep shares liquid… Read More

Many people are still terrified of the housing market. And rightfully so… many folks lost their jobs, their homes, their savings, and had to postpone retirement when the sub-prime mortgage industry dragged stocks and the economy down the drain a little more than a decade ago. Tell many of those same people that the median home sales price in the United States is more than $317,000, which dwarfs the peak in 2007 of $257,000, and they might think another downturn is imminent. Any data that portray weakness in the housing market sends shockwaves through the industry. We only need to… Read More

Many people are still terrified of the housing market. And rightfully so… many folks lost their jobs, their homes, their savings, and had to postpone retirement when the sub-prime mortgage industry dragged stocks and the economy down the drain a little more than a decade ago. Tell many of those same people that the median home sales price in the United States is more than $317,000, which dwarfs the peak in 2007 of $257,000, and they might think another downturn is imminent. Any data that portray weakness in the housing market sends shockwaves through the industry. We only need to look at 2018 as an example of the tenderness that investors have toward the real estate market. After coming off a stellar 2017, investors became worried that housing was heating up too fast, and home-sales were slowing on speculation that rising interest rates would keep buyers at bay.  The SPDR S&P Homebuilders ETF (NYSE: XHB) collapsed 25% last year on those concerns. Even today, demand for housing outstrips supply. At the current pace of home sales, it would take only 3.9 months to exhaust the available inventory. This is below the long-term average of six months — an indication of… Read More

Up one day, down the next. I don’t know about you, but I’m getting dizzy. Investors just can’t make up their minds about whether the huge rally of the past 11 years still has room to run, or if it’s the time to head to the sidelines. A convincing argument can be made for either decision. Here are three thoughts I have about what’s going on in the market right now — and what you can do about it…  1) Massive Buybacks Are Bolstering The Market (For Now…)  On the plus side is the strong economy, strong (albeit slowing)… Read More

Up one day, down the next. I don’t know about you, but I’m getting dizzy. Investors just can’t make up their minds about whether the huge rally of the past 11 years still has room to run, or if it’s the time to head to the sidelines. A convincing argument can be made for either decision. Here are three thoughts I have about what’s going on in the market right now — and what you can do about it…  1) Massive Buybacks Are Bolstering The Market (For Now…)  On the plus side is the strong economy, strong (albeit slowing) corporate profit growth, and the unabating wave of companies buying back their own shares. As reported by The Wall Street Journal a few days ago, more than 80% of firms in the S&P 500 have reported results for the first quarter. Of that number, those firms have repurchased $180 billion worth of their own shares during that time. This pace, according to the article, is lining up to become the second-highest amount on record (with data on corporate buybacks going back more than 20 years, to 1998). When was the record buyback quarter? According to the… Read More

Last week, the Dow Jones Industrial Average finished lower for the fifth week in a row.  That sounds important — and it is — but I will get to that in a moment. First, I want to step back and take a long-term view.  —Recommended Link— SECRET: Add $8,760 Extra to Any Retirement Account Finally revealed! This “long lost” secret turns a quick 3-minute phone call into the opportunity to collect $8,760 checks. Every payment is backed by the full authority of the U.S. Government… and over $1.75 billion will be delivered to income-seeking Americans. Read More

Last week, the Dow Jones Industrial Average finished lower for the fifth week in a row.  That sounds important — and it is — but I will get to that in a moment. First, I want to step back and take a long-term view.  —Recommended Link— SECRET: Add $8,760 Extra to Any Retirement Account Finally revealed! This “long lost” secret turns a quick 3-minute phone call into the opportunity to collect $8,760 checks. Every payment is backed by the full authority of the U.S. Government… and over $1.75 billion will be delivered to income-seeking Americans. But your action is required TODAY while the enrollment window is open. You must click here right now to get started. Here’s a monthly chart of the Dow Jones Industrial Average that goes back over the past 15 years. As you can see, there was a clear multi-year uptrend in the Dow that started back in 2009.  But since January 2018, that uptrend has stalled.  Technical analysts would say prices have been in a consolidation since then. I highlighted the consolidation pattern with a blue rectangle.  Charles Dow And The Business Cycle Writing in the late… Read More