Tag: financial projections

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How I Use Financial Projections to Shape Investment Strategy

“…it’s as if there is 30 seconds left in the game, you have the ball and are up by a field goal. All you have to do is take a knee to win. But, instead, you’re trying to score another touchdown.”

Background

The most important investment decision you can make is how much to allocate between major asset classes: bonds, stocks, commodities and real estate.

This decision alone drives the vast majority of risk and return experienced in a portfolio and, therefore, can have a tremendous impact on financial outcomes for most households.

Therefore, the majority of our time should be spent on this allocation decision. Additionally, this decision needs to be periodically evaluated. Continue reading “How I Use Financial Projections to Shape Investment Strategy”

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Fastest Correction In History…And The Importance of Financial Projections

Last Friday I wrote a market commentary to reiterate my concerns about market valuations but primarily focused on the fact that some technical (short-term) indicators were hitting historical extremes implying the potential for short-term problems in the market.

Last Thursday the S&P 500 closed at $3,386…an all-time high. Today the S&P 500 closed at $2,978 for over a 12% loss in a week. That’s a truly historic move. It’s the fastest correction in history for the S&P 500 and the fastest for the Dow since 1928 just a few months before the Great Depression. The Dow and the S&P 500 are on track for their worst weekly performance since the Great Financial Crisis in 2008. Continue reading “Fastest Correction In History…And The Importance of Financial Projections”

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May be a good week or two for stocks. Watch for this, however…

The market officially entered correction territory on Thursday (10%+ decline).

On Friday, the S&P 500 bounced off the 200-day moving average (~$2,539) and then had a huge reversal to the positive to close at about $2,620. This could indicate a continuation of the rally over the next week or two producing positive returns. I’ll be closely monitoring other key levels during this rally such as the 100-day moving average (~$2,640), 50-day moving average ($2,719) and, of course, the prior peak of $2,872 from January 26th. See chart:


Continue reading “May be a good week or two for stocks. Watch for this, however…”