What a year.
The widely followed S&P 500 index ended 2020 over 16% higher (18.4% total return w/ dividends) than it began the year even as it experienced one of the sharpest 34% declines in history (mid-February to mid-March).
The U.S. stock market managed a great year even in the midst of a global pandemic that saw businesses shut down, tens of millions of people lose their jobs, spike in corporate defaults, a steep recession (we’re still in BTW) and S&P 500 earnings that declined 13.6% from the prior year.
This means the entire increase in the S&P 500 was from expansion of the Price/Earnings multiple to over 30x, which is a level ONLY seen throughout history in the Dot-Com Bubble and Great Financial Crisis. The long-term average is about 16x. Continue reading “BRIEF: Year End Market Returns Summary”
The S&P 500 just logged one of its worst quarters in history and one of its best quarters in history back-to-back in the first half of 2020.
Specifically, the S&P 500 lost 20% in Q1 while making about 20% in Q2. The only other times in history this has happened were both during the Great Depression (Q3 or 1932 and Q2 of 1938) (Source: @Sentimentrader).
I’ve written about the potential for huge price swings in both directions previously.
This puts the S&P 500 down a little over 3% on the year while the global stock market is down over 7%. Meanwhile, gold and bonds are up on the year.
Continue reading “Wild Ride So Far in 2020”
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?”
2020 is the “Anti-1980” or as Seinfeld might say, the “Bizarro-1980.”
Baby Boomers and the Silent Generation enjoyed a wonderful investing era as they were hitting their career stride, and investing the bulk of their retirement savings, throughout the 1980s and 1990s. Contrast that to Millennials who may be hitting their stride now and starting to put decent money away. It’s really a stark contrast in the market environment between the two eras.
Below is a quick graphic comparing stock market valuations and total debt load within the U.S. economy between 1980 and 2020. The differences are obvious and significant. I’ll summarize below the graphic.
Continue reading “2020 is the “Anti-1980””
A couple weeks ago that I was interviewed for a local podcast, which focuses on local business owners and professional leaders. The podcast is now live!
Please forgive the first three minutes’ audio quality and informality. Quality improves at about 3:20. In the first few minutes we were just casually shooting the breeze as audio was getting set up, but then my gracious hosts decided to keep it in the podcast because it was interesting background.
Topics covered include risks facing nearly-/recently-retired folks and how those risks can be addressed, independent advisors vs. commissioned brokers, fees, active vs. passive, types of bonds to consider, stocks vs. bonds, potential returns over next 10 years, bitcoin, Tesla, Apple, steps you can take right now, when should someone hire a professional advisor, how to determine your investment strategy, etc…
There is some great stuff in here. I hope you find it interesting and helpful and share!
Thanks again to Variant Productions for the time and opportunity!