You Might Have Missed
February 20, 2018 | Daily JAM, Volatility, You Might Have Missed |
The market has finally (and probably only momentarily) stabilized enough for me to rebalance my Volatility Portfolio. My intention was to rebalance at the end of January but then stuff happened. You know 9% drop in the Standard & Poor’s 500, Â huge spike in volatility (as measured by the CBOE S&P Volatility Index (VIX) anyway), correlations shifting all over the place. But after the portfolio’s 53% gain in 2017 and with the changes in the market’s risk profile that are emerging, this portfolio badly needs a rebalance. And here it is. The portfolio is going into this rebalancing with 12 positions. It’s going to come out with 12 positions, although not the same 12 positions and not with the same weights for each position.
February 12, 2018 | Uncategorized, You Might Have Missed |
After getting their heads handed to them when volatility rocketed to 37.32 on the VIX on February 5 from 11.33 on February 1, low volatility traders were back today betting the the CBOE S&P 500 Volatility Index (VIX) would continue its fall from 25.61 at the close today. That’s another drop of 11.87% today. After that 230% move to the upside, which resulted in some low volatility ETFs recording 90% losses, the VIX is down 31.4% from its February 5 high.
February 9, 2018 | Uncategorized, You Might Have Missed |
Once upon a time, before the U.S. stock market moved into an actual correction and before bond yields spiked, the Federal Reserve was clearly on track to raise short-term interest rates at its March 21 meeting. The debate in the financial markets was about whether the Fed would increase its benchmark interest rate three or four times in 2018. But then we got tax cuts piled on top of spending increases.
January 30, 2018 | Daily JAM, Morning Briefing, Volatility, You Might Have Missed |
When is high too high? The U.S. stock market has been a real champ at sailing past the prospect of higher interest rates to new high after new high. But the march of the yield on the 10-year U.S. Treasury has led to a pause for thought among traders and investors. The yield on the 10-year climbed to 2.71% this morning.
January 23, 2018 | Uncategorized, You Might Have Missed |
This market remains determined to rally as we head into earnings season. Look no further than the reaction to earnings from Netflix (NFLX) for evidence. The stock market could have reacted to yesterday’s earnings from Netflix (NFLX) by selling down the shares. Could have. But didn’t.
January 18, 2018 | Daily JAM, Mid Term, You Might Have Missed |
2017 was a tough year for benchmarking my Dividend Portfolio. For the year the total price appreciation on the stocks in the portfolio was 3.4% The 21.64% return on the Standard & Poor’s 500 crushed that. The dividend yield on the portfolio for the year came to 3.11%. Which beat the 2.8% total return from holding 10-year Treasury bonds for 2017. The total return on my Dividend Portfolio for 2017 was 6.48%.
January 16, 2018 | Daily JAM, Perfect Five-ETFs, Volatility, You Might Have Missed |
Back in October 2017 I set up a very simple portfolio of 5 ETFs with the goal of beating the performance of a Standard & Poor’s 500 ETF (so that’s the benchmark) with less risk (because of the added diversification.) I said that I would rebalance this portfolio as needed–or on a six month schedule (which ever came first.) But that this would be a relatively passive portfolio of passive ETFs–but with some active management thrown in by way of those shifting allocations. Well, the portfolio certainly isn’t six months old, but we have flipped the calendar page into 2018 so I’m going to do the first performance report now and at the same time do an initial rebalancing of assets.
January 16, 2018 | Uncategorized, You Might Have Missed |
Ever since the January 11 announcement from Wal-Mart (WMT) that it would increase the starting wage rate for hourly workers to $11 (and provide a one-time cash bonus of up to $1,000 plus expanded maternity and parental leave b benefits,) pundits have seized on the news to say either “See, the Tax Cuts and Jobs Bill is already working,” or “This is all about competition for workers in a tight jobs market and has nothing to do with recent tax cuts.”
January 15, 2018 | Uncategorized, You Might Have Missed |
There is a possibility that the recently passed tax cuts will depress housing prices or at least the rate of growth in housing prices. That’s a big deal for any discussion of asset allocation in our portfolios because for most of us our house is by far our biggest asset since many of us are counting on the growth of value in our homes to fund part or all of our retirement.
January 13, 2018 | Uncategorized, You Might Have Missed |
Another week dominated by bank earnings reports will give traders and investors time to get really excited about the shift to earnings reports from other sectors in the week that begins on January 22. The big fourth quarter earnings reports for this coming week are Citigroup (C) on Tuesday (remember the market is closed on Monday for Martin Luther King’s birthday), Bank of America (BAC) and Goldman Sachs (GS) on Wednesday, and then finally some non-financial stocks on Thursday and Friday with IBM (IBM) and Schlumberger (SLB).
January 12, 2018 | Uncategorized, You Might Have Missed |
Going into earnings this morning from JPMorgan Chase (JPM) and Wells Fargo (WFC) what I wanted was an indication as to whether or not the stock market would care about the billions in one-time write offs that these banks would report for the fourth quarter due to the recently passed tax bill. That’s important because this one-time charge will show up on the earnings reports of other banks, of technology companies, and of big drug makers. On the early evidence today, the market doesn’t and won’t care.
January 10, 2018 | Daily JAM, Volatility, You Might Have Missed |
I find that I can’t move on to rebalancing individual portfolios until I’ve dealt with two more big potential problems for investors in 2018. Today’s topic: The possibility that we’re in the midst of a market melt up. What’s a melt up?
