The Independent Market Observer

Looking Forward to Q4 2018

September 28, 2018

The third quarter looks like another good one, at least here in the U.S. Despite ongoing turmoil—both political (with the Kavanaugh confirmation battle) and economic (with the rising trade conflict and tariffs)—markets rose steadily, reaching new highs. Markets abroad were not as positive, with emerging markets down and developed markets generally flat. On the whole, however, investors should be happy. Given the very real risks we faced at the start of the quarter, things could have been much worse. But will we be as lucky in the fourth quarter?

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Politics and the Market: How Worried Should We Be?

September 27, 2018

With politics heating up again—and the news from Washington driving scary headlines—I am getting more questions about what that turmoil could mean for the market. Will politics derail it? Will confidence be shaken? Should we be worried?

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Looking Back at the Dow Plunge of 2008

September 26, 2018

It was September 29, 2008, when the Dow Jones Industrial Average suffered what is now its second-largest point decline ever: it dropped 777.68 points during the day, after Congress’s rejection of the bank bailout bill. (Nearly 10 years later—on February 5, 2018—it closed down 1,175.21 points.) As bad as these declines were, however, they don't win the prize for the worst day ever in percentage terms. That would be October 19, 1987 (i.e., Black Monday), when the Dow lost 22.6 percent of its value. If we translate that into 2008 terms, the equivalent loss would be more than 2,500 points—or more than three times worse than the 2008 decline.

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Rising Rates: Looking Beyond the Fed

September 25, 2018

Today, the meeting of the Federal Open Market Committee (the FOMC or Fed) starts. It will conclude tomorrow with an announcement about interest rates, followed by a press conference. Markets expect the Fed to raise rates by one-quarter of a percentage point. This rise is fully priced into the market, which also expects an increase in December. So far, so good. These increases reflect continued economic growth and the rise in inflation to a more normal level, closer to Fed targets. In fact, the Fed raising rates is a sign of success, and failure to raise rates would cause much more concern than the expected increase.

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Monday Update: Housing Slowdown Moderates

September 24, 2018

Last week’s economic data was all about housing, but the week ahead will be a busy one. It will give us a solid look at the consumer’s thoughts and actions, as well as business activity and housing data.

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Market Reaches New Highs: Onward and Upward?

September 21, 2018

I should go away more often. While I was on the road, the market hit new highs and looks set to go even higher. This move is kind of a surprise, given the extensive discussion of the trade war, the political turmoil in Washington, the worries about the emerging markets, and on and on. What’s happening, and is it likely to last?

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Talking to (Worried) Clients on the Road

September 20, 2018

I am sitting in an airport writing this after a speaking trip—and running behind schedule—so this will be a short post. First, thanks to everyone who wrote in to congratulate me on my book, Crash-Test Investing. It is much appreciated. Second, thanks even more to those of you who bought the book—especially Mom and Dad! It is a great start to the publishing adventure.

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Get Your Copy of Crash-Test Investing Today!

September 19, 2018

I am very pleased to announce that my book, Crash-Test Investing, is finally available for sale on Amazon. Right now, only the paperback version is available, but we are working on the Kindle version. You should buy a copy for every room in your house, all your friends and family, and all the rooms in their houses. Go ahead—I’ll wait! Unless you’re a Commonwealth advisor, in which case you’ll be getting a copy at our National Conference.

Before doing that, however, you might ask yourself these questions: Why do we need another book on investing? And what do I have to offer that made it worth my time to write?

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S&P 500 Sector Changes: What Do They Mean for You?

September 18, 2018

Brad here. I don’t normally write too much about stock market inside baseball, but something is about to happen that will undoubtedly get a lot of press—and raise a lot of questions. Specifically, the companies that operate the S&P 500 are changing how they classify companies within the index. While these changes won’t actually alter anything about the index as a whole, or the companies within it, they could affect your investments. Because of that, I asked Brian McCormick from our Investment Research department to take a deep dive on what these changes are and what they might mean to you. Take it away, Brian!

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Monday Update: Inflation and Retail Sales Slow, Confidence Jumps

September 17, 2018

Last week’s data started with prices and whether inflation was picking up. This week’s economic data is all about housing.

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Market Downturn Ahead? Focus on the Data, Not the Date

September 14, 2018

You know the old saying: hindsight is 20/20. Apparently, foresight is as well because I have recently seen several prominent economists and investors calling for a recession in 2020. Repent, the end is near—but not all that near.

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The Great Financial Crisis: 10 Years Ago This Week

September 13, 2018

There has been much discussion recently about how the great financial crisis kicked off 10 years ago this week. We have retrospective interviews with participants, updates on how people fared during and after the crisis, and all of the typical media storytelling. It’s good stuff, and valuable for bringing a sense of perspective to the present moment. But it’s not all that useful in outlining what we should really be thinking of today in light of that history.

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Why Do You Need a Financial Advisor?

September 12, 2018

I was out with a friend the other night, and we got on the topic of what I do. He asked me a simple question: “why do I need a financial advisor?” He really did not get why anyone would want—let alone need—someone to help manage their financial lives.

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Monthly Market Risk Update: September 2018

September 11, 2018

Market risks come in three flavors: recession risk, economic shock risk, and risks within the market itself. So, what do these risks look like for September? Let’s take a closer look at the numbers.

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Monday Update: Business Confidence and Wage Growth Up

September 10, 2018

Last week was a short but very busy period for economic news, with looks at business sentiment, the trade balance, and, most important, the job market. This week’s data will start with prices and concerns over inflation.

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Economic Risk Factor Update: September 2018

September 7, 2018

Last month, I reported that business confidence had pulled back in July and that job growth had weakened. But the data bounced back in the most recent report, for August, suggesting that July was an outlier and the positive trends remain in place. While the question of whether the tariffs are finally starting to have an effect remains open, the current data indicates that, if so, the effect is minor.

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A Look Back at the Markets in August and Ahead to September

September 6, 2018

As we head into September, it’s a good time to take a look back at the markets in August, plus what we might expect in the month ahead.

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Monday Update (on Wednesday): Consumers and Manufacturers Confident

September 5, 2018

Last week was all about the consumer—what they are earning, what they are spending, and how confident they are. The week ahead is short but busy, with looks at business sentiment, the trade balance, and, most important, the job market.

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Market Thoughts for September 2018 [Video]

September 4, 2018

It was another good month here in the U.S., with the stock market up across the board. The economy, consumer confidence, and hiring all continued to grow. This growth is translating into corporate profits as well, with 80 percent of companies beating expectations.

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