Published February 3, 2017
During the financial crisis the stock market fell by over -50%. By February 1, 2011, the stock market had recovered about +80% from the market lows. Yet, investors still had not recovered from the losses. In fact, they were still down by more than -15%! Many investors might have wondered: why am I still “underwater”? How can an 80% gain be less than a 50% loss? Chart 1 below sets out the math of this situation.
Published January 27, 2017
A stock market rally is rarely about any single thing. While one event, news item, or good market day can certainly change the tone of the market, it takes a full menu of inputs turning positive to sustain and build a lasting rally. Such as been the case over the past three months. This overview of the past three months provides a good general display of how a stock market rally gets going and stays going. Whether this rally marks more time and higher prices for beyond three months is anybody’s guess. (more…)
Published January 20, 2017
Since we launched our award-winning investment website in July 2001 many investors have taken great advantage of our trend timing approach to the stock market to build their wealth. Over those fifteen years markets as well as technology has changed dramatically. Our efforts to keep up with changes in the markets have produced new models, new websites, and new portfolios to give investors a wider palette of choices to guide their investment journey. For our 15th birthday, we decided it was time to embark on embracing the new technology available to us. We launched a complete redesign of our original TimingCube website. Today, we announce that we are ready to release this new site to you, our loyal subscribers! (more…)
Published January 13, 2017
An area of the investment universe that receives little attention these days is the closed-end fund. These funds seem to have fallen somewhat out of favor among individual “retail” investors as exchange-traded funds (ETFs) have exploded in popularity over the past decade. They are a niche investment product to be sure, but one that can offer unique and sometimes compelling opportunities. (more…)
Published January 6, 2017
Looking at the Wall Street Journal’s chart below of the 2016 performance of myriad asset classes and indexes, we were struck by just how overwhelming the investment landscape can be. The list below does not even include all the indexes and subsectors available to investors. Nor does it begin to contemplate individual company stocks, options or futures on any of these securities, or bonds. From the thousands upon thousands of choices, we have made our focus the Nasdaq 100 index traded by the ticker symbol QQQ. Trading QQQ is our default. (more…)
Published December 30, 2016
Over the course of 2016 stock investors saw a dramatic shift in market leadership. As interest rates fell back in the first half of the year, so-called low volatility sectors led the market. These sectors tend to focus on higher dividends thus are beneficiaries of lower interest rate expectations. As markets entered the final quarter of the year and the Fed’s expected December interest rate hike became more of a certainty, leadership shifted toward sectors that are more cyclical along with those that benefit from a rising rate environment. This trend accelerated substantially after the election. (more…)
Published December 23, 2016
As technical chartwatcher-type folk, we review the year from a chart perspective. When doing so, we noted a major turning point in 2016 for the markets. That turning point occurred in mid-February. Take note of this headline from CNN-Money on February 11th as a reminder: “Oil crash taking stock down … again” (more…)
Published December 16, 2016
Diversification is a key tenet of the Trend Timing risk management discipline and should be part of every investor’s strategy. The simple definition of diversification is to include an assortment of investments in a portfolio in order to limit the exposure to any one of them going bad. There are however many types of diversification: (more…)
Published December 9, 2016
We have written a few times how the tremendous decline in energy earnings was pretty much the sole reason for the quarters-long negative streak in earnings for the S&P 500. Liz Ann Sonders from Charles Schwab wrote this week about the improving outlook for earnings and how that improvement has underpinned the recent stock rally. Here is what Mrs. Sonders had to say: (more…)
Published December 2, 2016
Stocks have surged after the election with investors enthused about a coming raft of tax cuts and increased government investment. The epicenter of this move has been domestic-focused stocks, particularly those of smaller companies. Companies with a more global footprint have been a mixed bag as concerns about a possibly more protectionist trade approach perhaps offsets the goodness of increased government cash infusions. To that end, our focus Nasdaq 100 index (QQQ) has substantially lagged the upward action. This lagging behavior might well portend coming troubles in the broader market as the post-election enthusiasm wears off. (more…)
