Third Quarter Tally Impressive for Stocks, Bonds, Gold

The third quarter turned in some decent results, in light of the historically weak seasonal period most years. We saw disparity in the market sector performance - that it - there was a wide range between the highest and lowest performing stock sectors.

Technology came out on top, with a gain of 8%, Financials, +4.7%, and Healthcare, +3%. Utilities, Communications gained about 3% each. Industrials, Energy up near 6% each, and Consumer Discretionary and Consumer Staples lagged; +1% and down 1%. There are 10 Sectors to the market: 5 beat the market itself, and 5 did not.

For the three months, we held the same two sectors - Technology and HealthCare. This improved our client results, as the “market” was up near 4% on the S&P 500 for the quarter. Combined with our holdings of bonds and gold, that was a winning combination with less risk than holding an all-stock portfolio. Gold rose $70 an ounce, or 3%.

So, for the quarter: Technology sector ETF, +8%
                               HealthCare sector ETF, +2.8%

                               S&P 500 (the market), up +3.9%

                               Gold, up +3.1%

                               Bonds, even to +1%

Remember that these sectors of the market are not stocks, they are Exchange Traded Funds (ETF’s) that hold many stocks but trade as a single security. We use these for most client portfolios to reduce individual stock risks. We also use bond ETF’s when clients desire monthly income.

The two other ‘core’ stock-based ETF holdings we use returned 2% and 4% for the quarter (clients: you will see any new selections for October by week’s end in your accounts).

As we all get older (don’t remind me), we are less comfortable to accept the risks of the markets; losing principal namely. We aim to generate performance that is diversified and pretty darn safe in bad bear markets. 

With stocks up about 15% through nine months this year, we’re pleased to show gains of +9% to +12% depending upon the client objective and mix of stocks / bonds / gold we recommend. Call me to see how we may help you.

In early August, it occured to me: I've been in the financial services business for 35 years! In 1982, I joined my father's investment firm after spending a year or so after college at Manufacturer's Hanover Bank in Durham, North Carolina. I wish to thank immensely my father Larry for his guidance and teaching me this business through the ups and downs.

He is still quite active on the job most days as Research Director - and we spend time every week discussing strategy, odds, and ideas that make sense for our clients and family investments.

With 78 years of experience between us - we've seen it all (or close to it all).

Thanks for reading.

Barry

   

Stocks Fall, Bonds and Gold Rally Sharply

U.S. stock prices fell today by about 2% across the broad gauges of measurement; Dow Jones, S&P 500 and Nasdaq markets. That's quite a hit for just one day. However, unless you live in a cave, or under a rock - you have to know that the stock market has been performing rather well the past few years.

If all your money is in the stock market - which is not common for most folks, then your gains or losses today would be different than what the media reports on the nightly news tonight.

Before today's action, stocks were ahead 8% on the year. Today they are 2% less, so we're about +6% year-to-date.

If most folks don't own all stocks, what do they own? A normal, balanced portfolio would own some bonds, and some fixed interest investments (CD's and fixed annuities, or cash), and perhaps some contrarian - asset like silver or gold.

We own bonds and gold in all client portfolios, and like to see it offset the risks of an all-stock portfolio. It has proven itself over 40 + years.

Today, Gold rocketed up $25 an ounce - that's +2%.

And bonds; they rose also as prices rose from demand that was leaving stocks today. Interest rates fell quite a bit: The popular bond funds and ETF's gained between 1/2 percent and 1% - a huge gain on one day for a bond investment!

All said and done, if we look at a diversified portfolio, stocks fell 2%, bonds gained about 1%, Gold gained 2% and cash under the mattress is still all there. If you held all 4 of these "buckets" of money with $100,000 total, you gained $250 today !

We always advocate a balanced approach to investing; it keeps the stress lower and we can sleep well at night.

Contact me for further information on our money management and planning services. Thanks for reading!

~Barry Unterbrink
(954) 719-1151

An Historic Day in 1932

July 8th, 1932, a historically significant day in the USA's financial system.

A rather obscure factoid, it marked the day that the stock market fell to a low never to be evidenced since. 

Most remember the 1929 stock market crash, which touched off the 10-year Great Depression. The crash affected all Western industrialized countries. If you are in mid-life, either your parents or grandparents experienced this dreary time for the USA first-hand. Ask them about that sometime.

From it's high near 400 on the Dow Jones Industrials Average in 1929, the stock market FELL 89% in value to close at 41.22 on July 8th, 1932.

Given today's Dow Jones level of near 18,000; that same decline would take us down to Dow Jones 2,000 !


I'm certainly not predicting that same outcome in the future, but I am not ruling it out entirely.

It would take 25 years for the 1929 stock market highs to be seen again, in late 1954.