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The Best of What They Said and I Read Week Ending 12/31/2017

Short excerpts from articles I found interesting.

I may not agree with the author and the following material is not intended as investment advice.

Barron’s – December 29, 2017 –Dow Industrials End Solid 2017 on a Sour Note - Ben Levisohn

“The Dow Jones Industrial Average fell 34.84 points, or 0.1%, to 24,719.22 last week, not a big deal. But the Standard & Poor’s 500 index fell 0.4%, to 2673.61, and the Nasdaq Composite dropped 0.8%, to 6903.39, their largest weekly declines since Sept. 8.”

“Despite ending on a sour note, it’s hard to argue that the year could have gone much better. The Nasdaq finished up 28% in 2017, while the Dow gained 25%, and the S&P 500 rose 19%. And the S&P 500 even managed to finish in positive territory each month on a total return basis—the first time that has ever happened…As we said: perfect.”

“Following perfection is rarely easy, though the market has been pretty good at responding to big gains with more of the same. Including reinvested dividends, the S&P 500 has returned 20% or more 26 times since 1943, and followed that up with another positive year 20 times, says Sadoff Investment Management. The average return following a 20% gain has been 12%. But four of the six down years—1962, 1981, 1990, and 2000—had one thing in common: The Federal Reserve was “dramatically tightening credit,” Sadoff says”.

Barron’s – December 29, 2017 – So Long 2017 – Next Stop, Euphoria  – by Vito Racanelli

“The big market news isn’t that U.S. stocks returned 22% in 2017—among the best of the major global indexes. Or that the eight-year bull is up 376% from its March 9, 2009, lows, for a phenomenal average annual return of 19%. Or that on no day in 2017 did prices close below the 2016 year-end mark.

“…When I asked fund managers for 2018 predictions, the two common themes were the return of inflation and potentially tough regulation of tech companies. One manager noted that after the bitcoin bubble bursts, the world’s new dominant currency will be Starbucks gift cards.”

Bloomberg Businessweek – December 25, 2017 – Not Everyone Loves ETFs That Come with a Political Opinion - by Carolina Wilson

“Is arguing with relatives over the holidays not enough fun for you?  Try partisan investing.  Money-management companies have already tried to sell people exchange-traded funds linked to booze, and overeating.  So it probably shouldn’t come as a shock that they’re on to an even touchier region of the American psyche: politics.”

“…The same company introduced other funds in October that purport to provide exposure to political and policy-driven ideas.  EventShares Republican Policies Fund, ticker GOP, and EventShares Democratic Policies Fund, symbol DEMS, employ hedge fund-like strategies by buying companies that may benefit from party policies and also shorting those that could be hurt – that is, betting on their prices to drop.“

U.S. Global Investors – December 29, 2017 – Investor Alert – by Frank Holmes

 “…For the first time ever in its nearly 90-year history, the S&P 500 Index had a “perfect” year. The index of large-cap companies ended positively every month of the year, propelled by the promise of corporate tax cuts and strong earnings growth.

“…Jeff Bezos bumped Bill Gates out of the number one spot for the world’s richest man. Could it be this greed that prompted record flow of money into startups? This year we witnessed $141.3 billion flow into what investors hope to be the “next” Amazon or Microsoft.”

“…The “fear index”—investors’ favored tool to measure stock market volatility and sometimes used as a leading indicator for market direction—traded at an all-time low in early November, indicating good times may linger for some time in the future.”

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