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Is It Halloween Yet?

Is It Halloween Yet 9.22.14

White House FenceThe Secret Service is on the ropes after some dope named Omar Gonzalez jumped the fence of the White House, sprinted across the lawn and entered the building before finally being stopped.  This is embarrassing for several reasons but mostly because it was a wasted opportunity to wear a pirate costume, carry a big pumpkin candy bucket and yell “Trick or Treat” at the front door.  I mean, it would have been early but if you are gonna go down, at least have a good story to tell.  Dumb ass.

Last week, the indices we follow all performed in line with their size – best to worst from biggest to smallest.  The Dow jumped to a record close last week by adding about 292 points (or about 1.7%) to close Friday at 17,280.  The S&P 500 rose about 1.3% to close at 2010 but the Russell 2000, a measure of small-cap stocks, was down -1.18%.

Here are the weekly charts for the week.

Weekly Market Returns 9-22-14

Weekly Sector Returns 9-22-14

The Length of the Bull Market and Perceptions           

flat stanley 9.22.14Gallup published an article back in August that had some pretty shocking (at least to me, maybe that’s the problem) stats about investors’ perceptions of the current state of the market along with their awareness of the past.  According to a survey conducted by Wells Fargo from late June into July of this year, 41% of those polled would invest extra money into the market while 36% would keep it in cash and 20% would buy a CD (read: cash).  What’s so shocking to me is my assumption that in mid-2009, or even well into 2010, those numbers would have probably been 0% into the market, 100% cash and 0% into CDs. So even today, about 56% of those surveyed are still not inclined to invest.

Oh, and as for historical PERCEPTION?  That’s even worse.  According to the same study, investors were asked how much they think the S&P 500 was up in 2013. Now, I know you, O Faithful Reader of the globally famous MWM Off the Wall Blog, are very aware of the return on the S&P 500 for 2013…(ahem – a little over 32% on a total return basis).  Brace yourself for this…

21% of the people surveyed thought the market was FLAT in 2013.

FLAT!

Ok – what about the rest you ask?  Well…37% of those surveyed think that stocks only increased 10% for 2013.

I feel awful for these people.  They have probably missed a bull market run on the S&P 500 (using March 9, 2009 as the bottom) that is now over 2020 days old.  It’s the 4th longest in post WWII history and a +200% return. Look at the “Chart of the Week” from JP Morgan Asset Management.

Chart of the Week 9-22-14This is a very sad chart.  What it’s telling you is that retail investors (unless you are the equivalent of the Chief Investment Officer at CALPERS, you are probably a retail investor) have been pulling money OUT of equities during this Bull Market run.

Here’s what I imagine a mental conversation has sounded like in the head of any retail investor represented in the JP Morgan chart:

2008 – “This thing is going to ZERO.” (S&P 500 down around -37%)

2009 – “This is a Dead Cat Bounce.” (S&P 500 up over 26%)

2010 – “Between Greece and the Flash Crash there is no way this is a good time to get invested.” (S&P 500 up over 15%)

2011 – “Between the Arab Spring and the U.S. downgrade, we are gonna see another 2008.” (S&P 500 up about 2%)

2012 – “Look, we’ve got the London Whale, the Fiscal Cliff and housing is going up again…no way this is a good time to get in…I’m waiting for a pullback.” (S&P 500 up over 15%)

2013 – “I’m going all in in 2014.” (S&P 500 up over 32%)

So You Are Still Worried?

Ari Wald, an analyst at Oppenheimer Asset Management, published the chart below. It says that historically, when the S&P 500 is trading above its 200-day moving average in an upward trend, the average return over the next 52 weeks is about 11% vs 4.1% when it is below the moving average (which it is not right now).  No guarantee of anything – but it’s a data point in a sea of talking head opinion on TV and print.

S&P 500 FOrward Performation 9.22.14

Important Disclosure Information

Monument-Wealth-Management-Blog-SubscribePlease remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Monument Wealth Management), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Monument Wealth Management.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Monument Wealth Management is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of Monument Wealth Management’s current written disclosure statement discussing our advisory services and fees is available for review upon request.

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David B. Armstrong, CFA

President & Co-Founder

Dave got into the industry when he discovered his passion for finance in his mid-20’s. He’s a combat veteran and served as an officer in the United States Marines Corps on both active duty and in the reserves, retiring at the rank of Lieutenant Colonel. While serving on active duty, Dave was unable to spend money on deployments, so he became a self-taught investor. Along with a few bucks cash as a bouncer, his investing performance grew to be good....

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IMPORTANT DISCLOSURE INFORMATION

Please remember that past performance is no guarantee of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Monument Capital Management, LLC [“Monument”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Monument. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. No amount of prior experience or success should be construed that a certain level of results or satisfaction will be achieved if Monument is engaged, or continues to be engaged, to provide investment advisory services. Monument is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice.

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