The Market vs. Deep Fried Turkey
One is very hot and can easily erupt into a fireball. The other has cooled. With the both the Standard & Poor’s 500 (S&P 500) and the Dow Jones Industrial Average sell off over 1.65% each, you can guess which one is which. Investors took cover as once again, the talk of Fed tapering swirled around the rumor and speculation mill. In fact, it was the largest weekly sell off in the past three months but there was some good economic news as well.
I had many folks ask how the deep fried turkey turned out. I am here to report that it was a huge hit and there was no fire…or trip to the emergency room. It took 45 minutes to cook a 16-pound turkey.
Now we are on to the holidays and the news that came out on retail sales last week was pretty good. In fact, it was the biggest gain in five months. And how about a BUDGET DEAL coming out of Congress? Wow. That’s nice to see but of course it added to the taper talk…so Wednesday will be the Fed meeting and we will see what happens. But look, here’s the deal, it’s going to happen sometime and when it does the market will sell off and then it probably recover. Don’t play around with guessing the taper, just stick to your plan. Because you have one, right? Seriously, it is more important to pay attention to what the Fed says than what they do. That’s my opinion anyway…
Below are our two standard charts that review the previous week’s performance across the major benchmarks and for the ten sectors of the S&P 500 index. Please note that the S&P 500 is up about 25% for the year so far. That’s more than half of the market selloff from the worst financial crisis since the Great Depression and it still seems like no one really feels good about their portfolios.
The graph below shows how well each sector did against the S&P 500
(rather than its actual return, meaning Materials did 1.02% better than the return on the S&P 500). While the market did poorly, you can see that cyclical sectors still did better than defensive sectors.
Bull Markets – Here is a Picture
This chart shows a lot of data. The intersection of the two dark lines is our current bull market. I’m no regression expert (thank you, Mr. Distractions – such as parties in college on Thursday nights), but the current Return/Time plot does not look like it’s out of whack.
And Finally…
This photo has been making the rounds – but I have the inside scoop from a well-connected friend. In this picture, you see the President and the Prime Minister of Denmark both celebrating because they have been long the equity market this year while the First Lady, who has held firm with her short positions all year, claims that she’s still right, but just early on her bearish call.
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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. 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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