Tag Archive | portfolio management

Will the stock market ever catch up to our volatile President Trump?

SmartStops comment:   It’s alarming to think that Trump has no senior trained economists in his midst.  And that one who has given some advice has been told to keep quiet.

“The stock market is up about 15 percent since the election — despite the considerable turbulence that President Trump has wrought. Sooner or later, goes the thinking, a volatile president will mean volatility for markets…”

The big question is has the stock market gotten ahead of itself?   “Trump’s November victory because Wall Street expected a gusher of profits. Tax cuts for businesses would boost profits directly. Tax cuts for individuals would do so indirectly by spurring consumption. Deregulation would slash corporate compliance costs. An ambitious infrastructure program would fuel a construction bonanza .

This post-election logic was not crazy, but it overlooked the rather consequential question of presidential competence. It failed to anticipate that Trump would squander political capital by … ”

Read full opinion article at : https://www.washingtonpost.com/opinions/sooner-or-later-the-stock-market-will-catch-up-to-our-volatile-president-trump/2017/05/24/e5e87bba-3fe1-11e7-adba-394ee67a7582_story.html

 

Markets take the stairs up and the Elevator down

SmartStops comment:  Great article about the nature of our 21st century markets and why one needs to stay protected in a fluid geopolitical environment .  Some interesting graphs are presented.

The article concludes:    Perhaps more than any other time in the last six decades, the fate of markets is inextricably intertwined with the ebb and flow of geopolitics. Investors can no longer hope to conceptualize markets as existing in anything that even approximates a vacuum.

Author’s central point – how much our Fed and central banks get involved:

“True, DM central bank liquidity and jawboning (read: forward guidance tweaking) have thus far managed to suppress the market’s response in terms of volatility, but as it turns out, what central banks can’t do is keep Pyongyang from launching ballistic missiles, keep euroskeptic candidates from marshaling an alarming percentage of the vote in France, bridge the sectarian divide in the Mideast, keep Erdogan from effectively declaring himself Sultan in Turkey, and/or keep things stable inside the Beltway.

So while markets may be conditioned to effectively ignore what’s going on in the world, that doesn’t change the fact that things are getting more unstable virtually by the hour (witness the manic news cycle). Eventually, this will catch up to markets because again, central banks can’t ultimately control geopolitical outcomes.

Read more at: https://seekingalpha.com/article/4074212-wednesday-bloodbath-attack-heisenberg-raison-detre

Is this £406m investment guru the mystery buyer of ‘stock market crash insurance’?

Interesting article out of the UK about what Ruffer who is one of Britain’s leading fund managers and oversees billions of pounds of savers’ cash and has a personal fortune of £406m.  He is reported to be ‘stockpiling’ insurance against a market collapse.

The investor who has been hedging using VIX Option contracts on the US market was unidentified until recently.  He had been dubbed  “50 cent”, after the well-known rapper and musician (and because the contracts are priced at 50 cents each) .  Was recentlly identified in Financial Times as Jonathan Ruffer who oversees the Ruffer investment house.     Read more at:  http://www.telegraph.co.uk/investing/shares/406m-investment-guru-mystery-buyer-stock-market-crash-insurance/

How will you keep your investments protected?

Earn higher returns by avoiding the downturns

Just look at how much per share one could save in this example with IBM below.  Stepping aside during a stock’s downturn can lead to higher returns overall for your investments especially when you consider that stocks on average will drop ~20% from their highs and market leaders can drop ~70% (per Investor Business Daily stats).     Buy & Hold philosophies have morphed to Buy & Protect as many studies have shown the increased value in skipping the downturns.   At SmartStops our goal is to help you protect your profits and minimize any losses.

IBM_SmartStops_Performance

With stocks near a record high, is a change of fortune just around the corner?

Mark Hulbert, who made his career in the investment industry by tracking stock market newsletter writers and predictors has this to say about our continuing bull market and fears of a downturn:

Opinion: Here’s what the oldest market-timing system in stocks is saying now

Published: Apr 13, 2017 8:39 a.m. ET  @ Marketwatch

He focuses on the Dow Theory as the classic “timing” system approach and reassures readers that
“For the moment, it says that all you Nervous Nellies can relax: All three of the Dow Theorists who I monitor on a regular basis believe the major trend remains up”

Of course that’s “for the moment”.

Regardless of who you want to follow in their “predictions” realize that the market is going to react to many different factors. Most important is to get flagged when true “risk” is developing. And that’s where we at SmartStops.net can assist you.

 Per Doug Kass: We’re Heading for a Bear Market So Plan Accordingly

SmartStops comment:   Interesting perspective posted on by Doug Kass (TheStreet.coM)  as to signals he’s watching.    

           SmartStops Mantra:     ALWAYS STAY PROTECTED !

From the article:     Since early August I have highlighted numerous technical divergences (in the weakness of the Russell Index (IWM) , new highs, the cumulative advance/decline lines, etc.), the schmeissing of the high-yield market (often seen as a precursor to stock vulnerability) coupled with growing evidence of weakening global economic growth (posing a threat to consensus corporate profit forecasts) and other factors (including valuation, sentiment and geopolitics) suggesting that a downward trend and (potential) bear market might be in the early state of developing.

History also shows that rising volatility in foreign exchange markets may be consistent with bear markets. (A good analysis by Nautilus Research can be found here.)

Economic weakness in Europe has been a worrisome factor that I have steadily highlighted.

Read entire article at:

http://www.thestreet.com/story/12904902/1/kass-on-the-market-i-am-throwing-down-the-bear-market-gauntlet.html?kval=dontmiss

 

Blackstone’s James Says Debt, Equity Markets Overvalued

“We’re between the bottom of the seventh and the top of the eighth,” Marks said in a Bloomberg Television interview last week. “It’s time for the seventh-inning stretch. You have to have plenty of defense on the field today.”

SmartStops Comment:  Defense is the best Offense!

View complete article at: http://www.bloomberg.com/news/2014-09-09/blackstone-s-james-says-debt-equity-markets-overvalued.html?cmpid=yhoo

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