Cash is getting an alarming amount of love these days.
When investors are nervous, they flee risky assets like stocks for the safety of cash.
That’s exactly what’s been happening lately. Since July 1, cash and money market funds have easily been the world’s most popular asset class, attracting $208 billion of inflows, according to Bank of America Merrill Lynch.
Millions of Americans make resolutions to hit the gym, eat more salad and smile frequently. But don’t forget to pay as much attention to your money.
Keeping tabs on your investment portfolio can be just as important when it comes time for retirement.
Here’s CNNMoney’s suggested list of New Year’s resolutions for investors:
1. Find your password and log on! Many investors who have their portfolios in cruise-control mode. While you don’t need to trade daily, it’s important to at least do an annual checkup on your accounts. Log in or call your 401(k) or brokerage account provider and see whether you should make any changes.
At your annual physical, you get your blood pressure checked. The equivalent to that in investing is looking at your asset allocation — how much you have in stocks versus bonds versus cash and commodities.
Is your asset mix still appropriate based on your age and risk tolerance? It could be time to make a change.
Posted in News and Views
Tagged 401k, bonds, brokerage account, cash, commodities, investment portfolio, investors, New Year resolution for investors, New Year's resolutions, resolutions, stocks
Nobody saw it coming.
To pick a winning stock at the start of March, you had to find a company that was hated by analysts, adored by short sellers, avoided by institutional buyers and averse to doing just about anything but pay dividends. Shares with those characteristics have generated returns of as much as 5.8 percent even as the Standard & Poor’s 500 Index stood still, data compiled by Bespoke Investment Group LLC and Bloomberg show.
The unlikelihood of arriving at such a blueprint after a five-year bull market is taking a toll on asset managers, with more than 80 percent of growth and value funds trailing benchmarks in 2014. For investors coming back to the market just as losses in Internet shares approach 20 percent, it’s a lesson on how little past performance says about the future.
via Hated Stocks Unlock Market as Analysts Prove No Guide to Gains – Bloomberg.
Brian’s Briefs, written and compiled Monday through Friday by Brian Weide, SunStar Mortgage Services
Friday, June 29, 2012
As I mentioned yesterday, bonds and Mortgage-backed Securities have been flip-flopping around like water on a hot skillet the last 10 days or so, and today was no exception. While closing off their lows, both securities closed lower today after having rallied yesterday. Data was mildly bond-friendly overall. Personal Income rose by .2%, which was twice the rate expected (see Moving the Market). Personal Spending was unchanged for May against expectations of +.1%. Core PCE Prices, which is a favorite gauge of the Fed in measuring inflation, as it works with consumer’s actual spending habits instead of a fixed “basket of goods” as does the CPI, was up by .1% vs. consensus estimates of .2%.
The Chicago Purchasing Managers’ Index landed at 52.9 for June- real close to estimates of 53.0 but not quite there. Finally, the final read for June for the University of Michigan Consumer Sentiment survey reported at 73.2; again, below estimates of 74.1. So with the exception of Personal Income, all the stats were below estimates, but yet very close; hence my insinuation that bonds were mildly supported by these numbers. However, data was not the main driver for bonds today. First off, stocks were strongly into rally mode (Dow +277.83 at 12880.09, Nasdaq +85.56 at 2935.05, S&P +33.12 at 1362.16), being buoyed by news that Eurozone officials have opened the door for Spain’s banks to be directly recapitalized with bailout funds once Europe sets up a single banking supervisor. Moreover, Spain will not have to take on additional sovereign debt.
In his wonderful TED talk, Kevin Slavin, a well-known game developer with an interest in algorithms, explains why we’ll never master the ramifications of such complex math. In regards to the Flash Crash, he says,
All of a sudden nine percent [of wealth] just goes away and nobody—to this day—can even agree on what happened. Because nobody ordered it. Nobody asked for it. Nobody had any control over what was actually happening… We’re writing these things that we can no longer read. We’ve rendered something kind of illegible. And we’ve lost the sense of what’s actually happening in this world that we’ve made…
When you see this kind of behavior, what you see is the evidence of algorithms in conflict, algorithms locked in loops with each other without any human oversight, without any adult supervision.
The only power we have over these algorithms, he suggests, is to press the “red button that [says] STOP.” Unsurprisingly, most leaders on Wall Street lack this kind of humility.
The coverage of Groupon’s revised S-1 filing Wednesday mostly focused on the deep red numbers splashed across the company’s balance sheets. And rightly so. Because as much money as the company is bringing in, it’s still a ways from making a profit.
And yet, sprinkled among the revisions to the document were other interesting tidbits–ones that speak to where the company is going. And, if looked at in the right light, they could hint at a more promising future than some might think.
Technical, demanding and breathtaking. Understand the flash crash of May 6th where the market dropped 1000 points in a few minutes.
Is the market manipulated or just out of control? Either answer sucks. If you think about equities, just remember, you are the hunted.
Taste the rainbow!