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Doom and Gloom

June 17, 2022By fdacic

Published June 17, 2022

Investors got what they thought they wanted this week when the Federal Reserve hiked interest rates by a full 0.75% and talked even tougher about fighting inflation. But a little post-rate hike relief rally gave way to yet another selloff the following day.

Investors have quickly shifted from worrying about inflation to fully embracing talk of a recession and downward revisions in corporate earnings. By many accounts, the recession is already here. It certainly felt gloomy and heavy in markets this week. (more…)

Uncategorized, Weekly Update

Are Market Fears Overblown?

September 17, 2021By fdacic

Published September 17, 2021

September is the worst month of the year for the stock market historically. As such, investors who are predisposed to worry unearth plenty of things to be concerned with. The pair of articles below discuss some of the current worries of investors. (more…)

Uncategorized

High Valuations and Seasonal Trends Make September a Scary Month

August 27, 2021By fdacic

Published August 27, 2021

We have written often in recent weeks about how extended the market seems to be. Some of this content has come from Schwab. Back in the late 1990s, Schwab notified clients more than once that the market’s valuation was excessive and to be careful. Similarly, they have been proactively warning this summer of higher-than-normal market valuations and a market ripe for some downside action. There are notable differences between now and the late 1990s. (more…)

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The Stock Market’s Winning Streak Leads to Calls for a Pullback

August 20, 2021By fdacic

Published August 20, 2021

The following content from MarketWatch highlights the reason why we are model-driven investors. It is all too easy to get caught up in speculation about what markets “should do” and let that drive our investment decisions. We find it far more productive for our money to row with the market’s price trend, recognizing that market prices move up as well as down, and allowing ourselves the flexibility to pursue gains regardless of market price direction.

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The Beauty of the Roth IRA

August 13, 2021By fdacic

Published August 13, 2021

The stock market continues to trade in a relatively quiet manner waiting for the next piece of information that will provide a jolt to push stocks one direction or the other. While we wait, we take this opportunity to review a fundamental financial planning concept – the beauty of the Roth IRA. (more…)

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Has Peak Earnings Growth Meant Peak Stock Market?

August 6, 2021By fdacic

Published August 6, 2021

Below is an article from Schwab on the connection between earnings and the stock market.

“In what shaped up to be a very impressive first half of the year for both the economy and stock market, stellar earnings growth has been a key ingredient. Coming off stronger-than-expected S&P 500 earnings growth of 53% (year over year) in the first quarter, second-quarter earnings are currently anticipated to grow by 78%, the highest since 2009. That is well higher than the initial consensus estimate of 65%. (more…)

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Returning to Normal

June 4, 2021By fdacic

Published June 4, 2021

While there remain many places still struggling with Covid-19 and its myriad effects, the broad U.S. economy is, less and less, one of those places. This week, the Federal Reserve made clear they are ready to begin backing out of the unprecedented market supports they put in place a year ago. It will be a good while before the Fed takes any action on interest rates. For now, they are beginning to sell off the assets accumulated during the height of pandemic uncertainty. Those assets are the corporate bonds and ETFs purchased by the Central Bank last summer to shore up wavering market confidence. (more…)

Uncategorized, Weekly Update

The Stock Market and the Economy

August 7, 2020By fdacic

Published August 7, 2020

One of the favorite sources of news and discussion topics in the financial media is the economy and speculation about its future health. Everyone knows that economies, whether local, national or global, repeatedly go through boom and bust cycles. These business cycles affect all of us to some degree but many in the investment community pay particular attention to them because of a fundamental belief that as the economy goes so goes the stock market. (more…)

Uncategorized, Weekly Update

The Drop in the U.S. Dollar Could Shift the Investment Landscape

July 31, 2020By fdacic

Published July 31, 2020

There has been a lot of attention recently about the sharp drop in the price of the U.S. dollar. This decline has sent gold and other commodity prices soaring. Driving this decline in the dollar is a quicker recovery in economies outside the U.S., last week’s coordinated stimulus action by the European Union (which bolsters the Euro), and the zero interest rate policy of the U.S. Federal Reserve for as long as the eye can see. To put this in context, until recently, the dollar enjoyed a very long run of strength as Europe and Japan struggled. (more…)

Uncategorized, Weekly Update

The Stock Market Adds New Fuel to the Rally

July 24, 2020July 31, 2020By fdacic No Comments

Published July 24, 2020

We have mentioned recently the need for the stock market to expand its participation if the rally was to continue. Over the past couple of weeks this appears to be happening. See below a variety of sectors outside the usual FANGMA* tech/consumer complex that have been showing strength. This rotation is what fuels longer-term stock market rallies.

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