Recent headlines have featured flares between world leaders at the present G7 conference, a developing trade war, and the NBA Finals. Current events have caught investors’ attention; however, what effect will current events have upon today’s stock markets?
Current events come and go, and investors must look beyond the headlines to see what is driving and influencing today’s stock markets. Investors must be aware of the general market cycle, where we are in that cycle, and how current events might play out in today’s stock market. To gain these insights, you must look at facts, figures, and sentiment, and place them in the larger context of history and the present day.
In our investment process, we ask ourselves what can go right and what can go wrong in today stock markets? To explore the negative side of this coin, you may ask “What can bring the current stock markets tumbling down?” This intriguing question is timely as this is the second longest bull market in history, and our investment committee discussed this very subject last month.
History shows us that bull markets don’t die of old age. Rather, something has to kill them off. Bull markets usually end usually because of an event or structural economic issue.
The 2000 stock market implosion was linked in part to the demise of overvalued and worthless “dot com” companies, leading to the dot com crash. In 2008 housing prices soared, becoming unaffordable for the average home buyer, Lehman Brothers declared bankruptcy, and the markets tumbled.
So again, what can bring today’s stock market down?
Rising interest rates?
An unpredictable President’s actions relating to foreign and domestic matters?
A trade war?
- The US-North Korea summit in Singapore on June 12?
- Today’s higher oil and gas prices?
At this time, no one factor looks likely to cause an imminent decline in the stock markets. Of course, you can never see a severe decline coming, despite what pundits may say. Declines happen in real time and it takes time for them to unfold and be confirmed as a significant decline and not a head fake.
As of today the stock markets are up for the year. Though it is not certain, it looks likely that the stock market will test and reach the stock market high water marks established earlier this year.
So what will happen if and when the stock markets reach the highs set earlier this year? Two scenarios appear likely.
1. Break through the previous high water level and go on to new highs
2. Test the previous highs, fail to break through, and fall into a trading range
At the moment, the stock markets and the economy are relatively steady. As longer term investors, Fortress encourages you to keep your larger, long term goals in mind at all times.
Meanwhile, we continue to monitor the markets closely and will stay in touch.
Saving for retirement is an important topic. Studies have shown what the most common road blocks to retirement savings are and how to overcome them. This short US News video might help you have a better retirement and brighter financial future--just click the image!
To see the entire article, click the link below.
Arizonians do not have to worry about change the clocks this weekend as most of the states. However, it is a concern when interacting with others affected by the time change. So don't forget that it's time to "spring" ahead tomorrow!!
There are many was to invest that has nothing to do with stocks and bonds and financial products. In five part series the "Five Rings of Investing," I'll introduce you to a few of the most popular ways to invest. The first ring is investing in "yourself". The return on this investment can be endless and can develop over a lifetime of events.
Going to an established, accredited educational institution to obtain a degree is a great way to invest in learning new concepts and develop valuable skills. However, it is not the only way to expand your knowledge or skills. Many have already done the formal education and want to continue development. Others have found that formal education is not the road to travel for them. There are continuing education programs, online trainings via webinars (many are free!), local events in your town that are great resources. Obtaining training to become certified or licensed in various fields are other options in many fields. There may be some formal training to complete through self study or other requirements that may be met before sitting for the test.
For the even more casual learner, many will opt to follow certain platforms within social media, magazines or books for those who enjoy some popular titles, authors or publications.
Have you considered starting your own business? Those who have taken their experience and training to the next level are branching out on their own. This has become one of the most up rising trends with all the changes in corporate America. Many individuals are starting up their own services, product launches and even taking hobbies to share their talents with the world. So if you want to sell Avon, build websites, become an Affiliate marketer or even start a Warren Buffet company, the sky is the limit if you have the desire to take that leap!
Next time, I will share "Ring 2 - Investing in Real Estate"!
Feel free to share and comment.
Enjoy your day!!
There a lot of questions surrounding the new tax bill that is coming down from the Trump administration. These changes are planned to take affect in the 2018 tax season. Check out this article from Forbes to see what changes you can expect. https://www.forbes.com/sites/kellyphillipserb/2018/01/27/as-tax-season-kicks-off-heres-whats-new-on-your-2017-tax-return/#39b79aec23d3
For income, we favor selected corporate bonds, preferred stocks, and higher yielding common stocks. We see growth potential in infrastructure, materials, and technology.
Pozole is a traditional Southwestern and Mexican dish, and hot soup hits the spot—especially on colder winter days. Here’s a delicious Posole recipe. Bon appetite!
1 tablespoon canola oil
1 (2 pound) boneless pork loin roast or chicken breast, cut into 1-inch cubes
2 (14.5 ounce) cans green chile enchilada sauce
2 (15.5 ounce) cans white hominy, drained
1 onion, sliced
½ cup green chile, diced
4 cloves garlic, minced
½ teaspoon cayenne pepper
2 teaspoons dried oregano
¼ cup cilantro, chopped
½ teaspoon salt
Pozole prep directions:
- Heat the canola oil in a skillet over high heat. Add the pork or chicken; cook and stir just until meat is browned on all sides, about 5 minutes.
- Place the meat in a 4 quart slow cooker. Pour the enchilada sauce over the meat. Top with the hominy, onion, chile, garlic, cayenne pepper, and oregano. Pour in enough water to fill the slow cooker.
- Cover, and cook on High for 6 to 7 hours. Stir in the cilantro and salt. Cook on Low for 30 minutes more.
The markets look strong and the forward looking data supports this. At the moment US stock prices levels are not overpriced, nor are they at bargain levels. A much anticipated 10% + correction has not materialized. The market’s steadiness indicates that investors are neither fearful nor overly exuberant. We believe the market’s upward bias will persist.
Twenty five percent of people abandon their New Year’s resolutions after one week, and this rises to 60 percent within six months. But while New Year’s resolutions don’t work, goals do.
Surprised? The research is conclusive. Dr. Gail Matthews, a psychology professor at Dominican University in California, did a study on goal-setting with 267 participants. She found that you are 42% more likely to achieve your goals just by writing them down. We do and it works. Write ‘em down
by Ken Nesler
As I look at some copies of the Wall Street Journal, New York Times and USA Today from October 20, 1987, all covering the previous day’s stock market drop of 508 points or 22.6% and became known as Black Monday. I kept the papers because I knew some day, I would want to read them again to remind myself of that dreadful, but challenging day. Look back, 30 years later, it seems to be a good day to do just that.
Some may recall the day as one of fear and confusion.
I remember it as one of the most interesting days of my career. Rather than panic and sell, I saw it as an opportunity to pick up stocks of solid companies at bargain prices. So, I bought. As a side note, because of the high volume, I didn’t know the actual price paid on some transactions until the next day.
How could I have been so nonchalant? The reason...I believe, was experience and cash. I wasn’t naïve. I had been trained and seasoned during the 1973-75 recession and market crash, not to mention the inflation and high interest rates of the 70s and 80s. I had also watched the market go up 22% the year earlier in 1986 followed by an additional rise of 43% through August. This good fortune at a time when the Federal Reserve was raising interest rates, which gave me an uneasy feeling. My reaction was to raise cash, which I did in late September and early October. By the time the crash came, our assets under management included a large cash position, some of which was reinvested on October 19.
Lucky to have had cash? Perhaps. Was raising so much cash, speculation or market timing? I don’t think so. You see, by 1987 I had already learned that bear markets and lower prices in general create opportunities. At the same time, bull markets and periods of higher prices should cause one to be cautious. In other words, when times are bad, look for positives and opportunities. When everything is going well, be cautious. This approach helped me in 1987 and has continued to be an underlying theme throughout my investment career, even today.