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The Market is On Fire – But is it Overheated?

I am writing a short blog for this week since I have to figure out how to deep-fry a turkey and ensure my homeowner’s fire insurance is up to date.  I can get lost for hours on YouTube with videos of exploding turkey fryers.  Anyway, come on in.  While it’s freezing in D.C., our blog site is toasty warm with a chart from a Wall Street Journal article that I think every investor should see.  Are we in a bubble? See for yourself.  In addition, MWM received a major accolade from a major media source in the Washington D.C. area!

Dave Washingtonian 11-26-13

 

First, I need to recognize the entire MWM team for making the firm a very special place to work.  We think Monument Wealth Management is a bright beacon in an industry that is truly a boring sea of sameness.  Turns out many other people agree.  Research Magazine, The Washington Business Journal and now Washingtonian Magazine have recognized us as a great place to work.  Every other year, Washingtonian Magazine features 50 of the Best Places to Work in D.C. as a cover story. (We’re in the December, 2013 issue.)  It researches firms across the region and they are all bigger firms than MWM.  However, during their research, they came across smaller firms that are also remarkable and note them as “Small Gems.”  MWM was recognized as a Small Gem and we are very happy about that.

Our clients also play a major role in MWM being a great place to work and for that, you have our deepest gratitude.

 

 

 

Below are our two standard charts that review the previous week’s performance across the major benchmarks and for the 10 sectors of the Standard and Poor’s 500 index (S&P 500).

 

Weekly Market Returns 11-25-13

Weekly Sector Returns 11-25-13

Bubble

These charts come from a November 19th article in the Wall Street Journal titled, Why the Stock Market Isn’t in a Bubble in Three Charts”.  However, if you are too busy brining a turkey to read the whole thing, here is the quick skinny – it is a plot of the 10-year rolling average for the S&P 500 and it shows the 10-year rolling returns back to 1936, along with the overall average. While rife with small up and down blips (yes, such as the August 2011 kerfuffle over U.S. debt downgrade, the “crisis recession” speculation, etc) note that the up and down trends tend to last for DECADES.  Also, note that the current reading is well below the average.

S&P vs Average3

(Thanks to Liz Ann Sonders at Schwab)

“Well gee Dave, what’s causing the equity market to print record highs?”

I proffer this… (Thanks Goldman and Blaine Rollins at 361 Capital.)

GS Research

Enjoy Thanksgiving…

Turkey Fire 6

Please call or email with questions.

Investment advice offered through Monument Advisory Group, LLC a Registered Investment Advisor (RIA).
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly. Stock investing involves risk including loss of principal. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries, and widely held by individuals and institutional investors. The Standard & Poor’s 500 Stock Index (S&P 500) is an unmanaged capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The NASDAQ Composite Index measures all domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. The Russell 2000 Small Stock Index is an unmanaged index generally representative of the 2000 smallest companies in the Russell 3000 Index. The Russell 2000 is an unmanaged index generally comprised of companies with lower price-to-book ratios and lower forecasted growth values.  The 2, 10 and 30 year Treasury is simply the yield at the close of the day.

(1)      West Texas Intermediate crude spot price is as of end of week.

(2)      London Bullion Market Association; gold fixing pricing at 3 p.m. London time.

 

David B. photo

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 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 Capital Management, LLC [“MCM”]), 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.   

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Please Note: MCM does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to MCM’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.  

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