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The Best of What They Said and I Read week ending 8/27/2017

Short excerpts from articles I found interesting.

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


U.S. Global Investors – August 25, 2017 - Investor Alert - by Frank Holmes

  • “…Meanwhile, small-cap stocks are effectively flat for 2017 and heading for their worst year since 1998 relative to the market, according to Bloomberg. Hedge funds’ net short positions on the Russell 2000 Index have reached levels unseen since 2009. Remember, these are the firms that were expected to be among the biggest beneficiaries of Trump’s “America first” policies.”
  • “…The major market indices finished up this week.  The Dow Jones Industrial Average gained 0.64 percent. The S&P 500 Stock Index rose 0.72 percent, while the Nasdaq Composite climbed 0.79 percent. The Russell 2000 small capitalization index gained 1.45 percent this week.”
  • “…According to an article published this week in the Wall Street Journal, growth is taking off around the world. All 45 countries tracked by the Organization of Economic Cooperation and Development are on track to grow this year, and 33 of them are poised to accelerate from a year ago. It is the first time since 2007 that all countries are growing and most countries are in acceleration since 2010.”

Barron’s – August 26, 2017 – Bracing for the Aging Bull Market’s  Last Hurrah - by Leslie P. Norton

  • “…Doug Ramsey, Leuthold’s chief investment officer…We checked in with Ramsey about the outlook for this elevated market. Ramsey believes that a short-term downturn is in the cards, followed by an up leg that “could be the bull market’s last.”
  • “…What should investors do? This is a market better suited to speculators than investors. There is no way that we can contort the numbers so that the next seven to 10 years look appealing to buy and hold, either equity or balanced investors. Here’s a simple thought experiment. Consider a standard balanced portfolio with 60% in the S&P 500 and 40% in 10-year Treasuries. Since 1880, that portfolio has generated an annualized return of 8%, which is obviously a common return target used by pension funds. The rub is that the 60/40 mix over the past 138 years also provided a median portfolio yield of 4.1%. More than half the return was generated by income. Today, the yield on that portfolio is 2.1%. Stocks were more overvalued in early 2000. Bonds were more overvalued in the summer of 2016. But they’ve never been more contemporaneously overvalued than they are today.”
  • “… We think the portfolio will struggle to generate maybe 3% to 4% over the next 10 years. That is inescapable investment math that challenges the bulls. The challenge to the bears is the market’s recent performance. The most recent high was broad and ran the gamut from defensive to high beta.”
  • “…No small-caps?  Historically, the best time to own them is early in a bull market.  In the first 12 months of a new bull market, small-caps outperform by 14%.  The rest of the bull market, they outperform by 0.4%, and during bear markets, they underperform by 2%.”

MarketWatch with permission from NextAvenue.org– August, 19, 2017 – New Rules for Exercising if You’re Over 50 - by Linda Melone

  •       “…A funny thing happens on the way to 50 and beyond: Your body doesn’t respond to exercise as it did earlier in your life. Fatigue, muscle and joint aches and increased injuries seem to happen with greater frequency.  Unfortunately, it’s not your imagination. It happens to the best of us as a natural consequence of aging. In fact, some of the “standard” fitness rules no longer apply, at least not in the same way as they did in your 30s and even 40s. Here’s how the rules change after 50 and how to stay injury-free as you age.”
  • “…Old rule: Stretch a few days a week.  New rule: Stretch after every workout, and then some.” 
  • “…Old rule: Slow and steady cardio works best.  New rule: Use interval training to pump up the fat burn.”
  • “…Old rule: Take one day in between each weight training workout.  New rule: You may need longer than a day between workouts.”
  • “…Old rule: Warming up is optional.  New rule: Always include a thorough warm-up.”

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