It’s not what you make that matters but what you keep!
This is a great opportunity to talk about tax-loss harvesting.
We’ve just experienced the fastest 30% decline from an all-time high in history. It took only 22 days. “The second, third and fourth fastest 30% declines all occurred during the Great Depression era in 1934, 1931 and 1929, respectively.” – Yun Li, CNBC
That means many investors probably now have positions with significant unrealized losses. This is a great opportunity to harvest those! Continue reading “A Great Time to Talk About Tax Loss Harvesting”
First of all, I hope this finds you well. We say that a lot, but it has such a deeper, intense meaning today, doesn’t it? In any case, I truly hope you and your families are safe.
As for our family, we’re doing just fine. I actually think our middle child, Lexi (6), is going to go back to school far ahead of where she was when they dismissed! She’s been cranking through the math workbooks that Mom got her.
I’ve got so many things I want to talk about that I think are important right now. Don’t worry, I’m only going to focus on one topic here, but it was a struggle to figure out what I wanted to address tonight.
Ultimately, I’ve decided to talk about the bond markets as the stocks markets have, understandably, been getting all the attention. Other topics you can expect in coming days and weeks are: precious metals and gold miners, big picture overview, coronavirus metrics you may not have seen yet, deflation vs. inflation, my market timing strategies’ performance results through this historic decline (preview: they have fared very well). Continue reading “What Have the Bond Markets Been Up To?”
It’s official, the U.S. stock market has been in a bear market since it’s all-time closing high on February 19, 2020. Yesterday, the U.S. market had it’s worst day since Black Monday 1987 (market lost over 22% in a single day).
- This is the fastest retreat to a bear market from an all-time high in history taking just 16 trading days.
- This ends the bull market that began with the cycle low on March 9, 2009 for an eleven year run and 400% price appreciation. That run makes it both the longest and strongest bull market on record!
- The S&P 500 is down about 27% from its 2/19/2020 all-time high as of yesterday’s close, which is a level first seen on August 7, 2017 essentially wiping out 2.5 years of appreciation.
- The market would have to climb over 36% from yesterday’s close to get back to the all-time highs.
- For contrast, the foreign stock market (MSCI All Cap World Index) has been in a bear market since January 26, 2018 and is only up about 60% from the March 9th, 2009 lows.
Yesterday, sentiment hit EXTREMELY low levels with CNN’s Fear Greed Index at a record low of just 1.
Continue reading “NOW It’s An Official Bear Market. Some Thoughts…”
Lots of articles out today claiming we are now officially in a bear market, but that’s not really true…at least not yet.
Technically, a bear market is at least a 20% decline from a peak (using closing prices). I’m not a huge fan of that definition since it’s a bit arbitrary, however, it’s widely used so we’ll stick with it to be consistent with the rest of the industry and financial media.
Yes, today, the Dow Jones Industrial Average (DJIA) closed more than 20% lower than it’s all-time high closing price from 2/12/2020. However, the DJIA is only made up of 30 stocks. I have no idea why people are so intent on following the DJIA when it’s a tiny sliver of the U.S. stock universe let alone the global stock universe.
In any case, the S&P 500 still has not technically met the 20% threshold. Neither the global stock market (MSCI All Cap World Index) nor the broader U.S. stock market (Russell 3000) have met that threshold either although all are very close. So, for now, the bull market that began in U.S. stocks back on March 9, 2009 is still in tact.
Here’s a good chart showing corporate leverage and its correlation to cyclical peaks. This is one reason I’ve been avoiding corporate bonds in favor of Treasury bonds the last few years.
I don’t think the next crisis will begin with mortgage defaults this time around but with a wave of corporate defaults.
Continue reading “One Reason I’m Avoiding Corporate Bonds”