December 3rd Market Commentary

December 3, 2018

The Markets

Hold on to your hats!

Recently, stocks have delivered a wild ride. During Thanksgiving week, U.S. stock markets took investor uncertainty on the chin, suffering a 3.8 percent drop, which was the worst performance in eight months. Then, last week, stocks reversed course. The Standard & Poor’s 500 Index and the Nasdaq Composite delivered their strongest weekly gains in seven years, reported Ben Levisohn of Barron’s.

So, what changed?

Two things appear to have influenced investors last week:

1. The Federal Reserve may be becoming more dovish on interest rates. Comments made by Fed Chair Jerome Powell were interpreted to mean the Fed could stop raising the fed funds rate after December. Thomas Franck of CNBC reported:

“Powell on Wednesday said that rates were ‘just below’ the level that would be neutral for the economy – meaning they would neither speed up nor slow down economic growth. The comment diverged from a previous remark from Powell that rates were a ‘long way’ from the bank’s aimed neutral level.”

Some analysts have pondered whether recent rate hikes have been a mistake that will lead to recession.

2. Trade tensions between the United States and China could be resolved. President Trump and President Xi Jinping will have a confab following the Group of 20 (G-20) meeting in Buenos Aires. Randall Forsyth of Barron’s offered this insight:

“The best case that can be reasonably expected is for a truce to be declared between the United States and China, to allow talks to continue over the thorny issues of trade barriers and intellectual property. And, equally important, to avoid the consequences of the imposition of even more draconian tariffs on the world economy.”

There is little doubt volatility feels a lot better when share prices move higher than when they move lower. While uncertainty remains elevated, we may see additional jolts up and down. It may be a good idea to ensure your portfolio is well allocated and diversified. Holding diverse assets and investments won’t prevent losses during downturns but it can help minimize losses as investors pursue of long-term financial goals.

FOUR FABULOUS HOLIDAY GIFT IDEAS FOR YOUR PET…If you’re a pet owner – and most Americans are – you may be looking for the perfect holiday gift for your dog, cat, bird, bunny, or reptile. Some pet owners will spring for a heated pet bed, a sparkling holiday sweater, or a new grooming set. Others may opt for a decadent pet treat.

Here are some of the indulgences available for today’s pets:

A stay at a luxury cat hotel. Why not give your favorite cat the holiday of his or her dreams? Five star catteries have been established in Yorkshire and Kuala Lumpur (and, possibly, elsewhere). The VIP package in England includes, “…bedtime stories, catnip experience, relaxing Spa package, or a juicy prawn plate from [the] a la carte menu.”

A relaxing day at the guinea pig spa. The British really know how to spoil their pets. Guinea pigs who travel to the English countryside can receive, “…the full works: a body massage with oils; full shampoo, condition, and blow-dry; haircut and styling; feet and ear massage; nails trimmed and filed; and even a photo shoot of the transformed pet.”

A case of pooch hooch. Breweries and pubs around the world have begun to accommodate our desire to share all aspects of our lives with our faithful canine companions. Patrons can bring their pets to the bar and buy them a drink or a case of dog beer. According to VinePair.com, “Dog beer is non-alcoholic, un-carbonated, and doesn’t contain hops. It does contain malt extract, along with a bevy of other healthy-for-dogs ingredients, so you might think of it like a nutritional homebrew, without the fermentation.”

A few bottles of feline wine. You know how it is. The hounds are happy with dog grog, but cats have more refined tastes. They may prefer a pack of ‘MosCATo’ or ‘Pinot Meow’ – and now they can have it. One animal wine provider described its mission this way: “Our cat wine and dog wine creations started like any other radical idea…a product designed to help bridge the social divide between humans and their pets.” What better way to ring in the New Year?

Don’t fret if you haven’t found just the right gift yet. Pets are usually appreciative of whatever you give them.

Weekly Focus – Think About It

“Owners of dogs will have noticed that, if you provide them with food and water and shelter and affection, they will think you are a god. Whereas owners of cats are compelled to realize that, if you provide them with food and water and shelter and affection, they draw the conclusion that they are gods.”
--Christopher Hitchens, author and journalist

 

* These views are those of Carson Group Coaching, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
* This newsletter was prepared by Carson Group Coaching. Carson Group Coaching is not affiliated with the named broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Stock investing involves risk including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* Consult your financial professional before making any investment decision.

 Sources:
https://www.barrons.com/articles/s-p-500-notches-its-best-week-in-seven-years-1543625065 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/12-03-18_Barrons-S_and_P_500_Up_4.8_Percent-Notches_Its_Best_Week_in_7_Years.pdf)
https://www.cnbc.com/2018/11/30/bond-market-fed-minutes-g-20-summit-and-us-china-trade-in-focus.html
https://www.brookings.edu/blog/up-front/2018/10/12/wessels-economic-update-are-the-feds-interest-rate-hikes-a-mistake/
https://www.barrons.com/articles/what-this-market-really-needs-from-the-g20-1543593590 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/12-03-18_Barrons-What_this_Market_Really_Needs_from_the_G-20-Footnote_4.pdf)
https://www.theingsluxurycathotel.co.uk/v-i-p/
https://www.thetimes.co.uk/article/guinea-pigs-in-blankets-z59hck96s
https://vinepair.com/articles/best-dog-beer-guide/
https://www.apollopeak.com/pages/about-us
https://www.goodreads.com/quotes/tag/pets

 

November 26th Market Commentary

The Markets

It was a turkey of a week.

The United States and China continued to spar over trade and other issues. An expert from Moody’s told Frank Tang of the South China Morning Post (SCMP) the United States-China dispute will not be easily resolved:

“Look at the speech Vice President Pence gave in Papua New Guinea at the Apec conference. He didn’t just talk about trade, but also intellectual property, the South China Sea, forced technology transfers. So there’s a whole long list of issues the U.S. administration is now raising…”

Financial Times reported the Organization for Economic Coordination and Development (OECD) anticipates global economic growth could stumble if trade tensions escalate.

SCMP reported investors are hoping for greater clarity around trade issues when President Donald Trump meets with China’s President Xi Jinping at next week’s G-20 Summit.

The climate report added a new dimension to uncertainty about economic growth last week, reported Fortune. Black Friday shoppers may have missed it, but the U.S. government released the 4th National Climate Assessment on Friday. Ed Crooks of Financial Times summarized some of the report’s economic findings:

“The largest costs of climate change for the United States this century were expected to come from lost ability to work outdoors, heat-related deaths, and flooding…If [greenhouse gas] emissions are not curbed it warns, ‘it is very likely that some physical and ecological impacts will be irreversible for thousands of years, while others will be permanent.’”

Major U.S. stocks indices finished the week lower. It was the biggest drop during Thanksgiving week since 2011, according to CNBC.com.

AMERICANS ARE HARD WORKING AND GENEROUS. Take a guess: How many hours do Americans work each year relative to Europeans?

Here are a few hints provided by The Economist and Expatica:

• The average American has 23 vacation days each year.
• The Spanish and the Swedes average 36 vacation days each year.
• Workers in the European Union are guaranteed at least 20 paid days of holiday each year, excluding public holidays.
• The United States has 10 public holidays.
• The British have 8 public holidays.
• Germans may enjoy as many as 13 public holidays, depending on where they live.

So, how many hours do Americans work relative to our European counterparts?

In a typical year, Americans work 100 hours more than the British, 300 hours more than the French, and 400 hours more than the Germans, on average. The Economist reported:

“In 2017 the average American took 17.2 days of vacation. That was a slight rise on the 16 days recorded in 2014 but still below the 1978-2000 average of 20.3 days. Around half of all workers do not take their full allotment of days off, which averages around 23 days. In effect, many Americans spend part of the year working for nothing, donating the equivalent of $561 on average to their firms.”

That’s pretty generous.

There is a case to be built for the importance of taking more vacation time, according to the Harvard Business Review. “Statistically, taking more vacation results in greater success at work as well as lower stress and more happiness at work and home.”

Food for thought as you consider New Year’s Resolutions.

Weekly Focus – Think About It

“When you are inspired by some great purpose, some extraordinary project, all your thoughts break their bonds: your mind transcends limitations, your consciousness expands in every direction, and you find yourself in a new, great, and wonderful world. Dormant forces, faculties, and talents become alive, and you discover yourself to be a greater person by far than you ever dreamed yourself to be.”
--Patanjali, Hindu author and philosopher

 

* These views are those of Carson Group Coaching, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
* This newsletter was prepared by Carson Group Coaching. Carson Group Coaching is not affiliated with the named broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Stock investing involves risk including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* Consult your financial professional before making any investment decision.

Sources:
https://www.scmp.com/news/china/article/2174648/us-china-trade-tensions-deepen-2019-hitting-chinese-economy-moodys
https://www.ft.com/content/e563446e-ed0e-11e8-89c8-d36339d835c0 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-26-18_FinancialTimes-US-China_Trade_War_Risks_Heavy_Toll_on_Growth-Footnote_2.pdf)
https://www.scmp.com/business/china-business/article/2174695/uncertainty-over-trade-war-likely-weigh-china-growth
http://fortune.com/2018/11/24/climate-change-report-economy/
https://www.ft.com/content/216b5ed2-ef68-11e8-89c8-d36339d835c0 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-26-18_FinancialTimes-Climate_Change_Could_Cost_US_Billions-Footnote_5.pdf)
https://www.cnbc.com/2018/11/23/stock-markets-dow-set-for-losses-as-trading-resumes-for-half-day.html
https://www.economist.com/business/2018/11/24/americans-need-to-take-a-break (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-26-18_TheEconomist-Americans_Need_to_Take_a_Break-Footnote_7.pdf)
https://www.expatica.com/de/about/Public-holidays-in-Germany_105411.html
https://hbr.org/2016/07/the-data-driven-case-for-vacation
https://www.goodreads.com/author/quotes/80565.Pata_jali

 

November 19th Market Commentary

November 19, 2018

The Markets

Keep your eyes on the horizon.

Motion sickness happens when your body receives conflicting signals from your eyes, ears, and other body parts. One way to manage the anxiety and queasiness that accompany the condition is by keeping your eyes on the horizon.

The motion of the stock markets has been causing some investors to experience similar symptoms. Surprisingly, the remedy is the same: Keep your eyes on the horizon – your financial planning horizon.

A planning horizon is the length of time over which an investor would like to achieve his or her financial goals. For instance, perhaps you want to pay off student loans by age 30, fund a child’s college tuition when they reach age 18, or retire at age 60.

When stock markets are volatile, an investor may receive conflicting signals from various sources, which may induce anxiety and queasiness. When you start to worry about the effects of market volatility on your portfolio, remember stock markets have trended higher, historically, even after significant downturns.

For instance, in 2008, during the financial crisis, the Dow Jones Industrial Average lost about 33 percent. It finished the year at 8,776. The drop sparked tremendous anxiety among investors who wondered whether their portfolios would ever recover.

Last week, the Dow closed at 25,413.

While stock markets have trended higher historically, there is no guarantee they always will. That’s why asset allocation and diversification are so important. A carefully selected mix of assets and investments can reduce the impact of any single asset class or investment on a portfolio’s performance. Keep in mind, of course, past performance is no guarantee of future results.

Last week, stock markets finished lower. MarketWatch reported U.S. stocks moved higher on Friday after President Trump indicated he might not pursue tariffs against China.

 

WHAT IS AN APOLOGY WORTH? John List, an economist at the University of Chicago and Chief Economist for a ride-sharing app, needed to go from his house to the hotel where he was a keynote speaker. So, of course, he called his ride-sharing company. The experience was less than stellar, as he explained to Steven Dubner of Freakonomics Radio:

“So I get in the back of the car and it says I’m going to be there in 27 minutes. So I go into my own land of working on my slides, because of course I’m doing things at the last minute. I lose track of time. I look back up about 25 minutes later, and I’m back in front of my house…And I said, ‘Oh my god, what happened?’ The driver said, ‘I got really confused, and the GPS switched, and we turned around and I thought that you changed the destination, so I went back.’ So I told her immediately, ‘Turn around, go back.’ I missed part of my panel.”

List also missed an apology, which neither the driver nor the company offered.

He decided to investigate how much mistakes, like the one he experienced, cost the company and whether an apology would reduce the cost. As it turned out, the cost of 5 percent of trips that resulted in customers being 10 or 15 minutes late was 5 to 10 percent in lost revenue.

List enlisted the help of researchers Benjamin Ho of Vassar College, Basil Halperin of Massachusetts Institute of Technology, and Ian Muir of the ride-sharing company, and conducted a field experiment on clients of the ride-sharing company. They discovered apologies are not universally successful at reducing the costs associated with a bad experience. The most successful apologies had a monetary value. In their case, a $5 coupon produced a 2 percent increase in net spending.

The team discovered another important fact. Apologies lose value and can inflict reputational damage when a company has to apologize multiple times.

No surprise there.

Weekly Focus – Think About It

“When dealing with people, remember you are not dealing with creatures of logic, but creatures of emotion.”
--Dale Carnegie, American writer and lecturer

* These views are those of Carson Group Coaching, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
* This newsletter was prepared by Carson Group Coaching. Carson Group Coaching is not affiliated with the named broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Stock investing involves risk including loss of principal.
* Consult your financial professional before making any investment decision.

Sources:
https://www.sharp.com/health-news/does-looking-at-the-horizon-prevent-car-sickness.cfm
http://afcpe.org/assets/pdf/volume_25_2/09013_pg174-196.pdf
https://finance.zacks.com/longterm-stock-market-trends-6294.html
https://finance.yahoo.com/quote/^DJI/history?period1=1167631200&period2=1230789600&interval=1d&filter=history&frequency=1d
https://finance.yahoo.com/quote/^DJI?p=^DJI
https://www.investopedia.com/terms/s/systematicrisk.asp
https://www.marketwatch.com/story/nasdaq-poised-to-fall-1-at-the-open-as-nvidia-weighs-on-stock-market-chip-makers-2018-11-16
https://www.reuters.com/article/us-usa-trade-china/trump-says-u-s-may-not-impose-more-tariffs-on-china-idUSKCN1NL28Q
http://freakonomics.com/podcast/apologies/
http://s3.amazonaws.com/fieldexperiments-papers2/papers/00644.pdf
https://www.brainyquote.com/quotes/dale_carnegie_130727