1 Sept 2015
Dear friends and clients:
September is not starting out very well for the stock market, with prices today down about 3% for stocks, while Gold and Bonds up about 1/3 of one percent.
For the month of August, a diversified portfolio (25% each) of stocks (S&P 500), bonds (20 yr. Treasury), and Gold and Cash (money market) resulted in a loss of about 1%. Stocks fell 6%, the bonds and cash were essentially break-even, while Gold rose 3.7%.
More importantly, maximum drawdown of the portfolio (the lowest return during the month on a daily close), was just -2.6% on the diversified portfolio, vs. -11.2% for the stocks. That's important and represents the volatility of an all-stock portfolio in a falling market for stocks.
Stay diversified my friends!
Barry Unterbrink, C.R.P.C.
www.stetsonwealthmanagement.com
Retirement Planning Advice and Financial Related Education by Barry Unterbrink, Chartered Retirement Planning Counselor
Tuesday, September 01, 2015
Gold and Bonds Assist a Diversified Portfolio
Barry Unterbrink is a fee-based Chartered Retirement Planning Counselor and wealth manager since 1982. As a second generation manager after his father Larry (1934-2021), they managed institutional pension funds totaling $100 million.Both are former Investment Advisory Presidents and financial newsletter publishers.
Monday, August 24, 2015
Stocks Fall Again, Reach 10% Loss in August
Stock prices felt the pain of more sellers today, as equity prices fell around 4%.
Many stock were halted for trading only a few minutes after they opened at 9:30 a.m. then after they did open later in the morning prices zoomed upward with the demand, creating some wide price swings.
For instance, Facebook shares traded at 72 early on and closed at 82. Apple was traded at 92 just after 9:30, and ended the session at 103. Verizon at was on sale at 38, to close at 44. These are big, institutionally traded, household name companies, and a lot of investors are upset that they did not have a chance to buy or sell at these prices. Welcome to the imperfect world of Wall Street.
I came across an interesting statistic on markets from a year ago blog. In the past 10 years, there is a one in 20 chance that stock prices will fall 5% in any given month. If they do, the average decline to the bottom of that cycle is a 12% loss. Stocks have fallen 10% so far in August as measured by the S&P 500 index. So on an average historical basis, the selling might be over. That's just the average (mean) of the fall, however. This 6 year bull market in stock prices we knew would end sometime. We were perhaps surprised that it would take only a week or so to play out (hopefully).
In the six trading days ended today, bonds and gold did help immensely in mitigating stock price declines - the box score: stocks -9%, bonds +2% and Gold +3.4%. Funny but you only hear the doom and gloom on the news reports on stocks (including CNBC, and the talking heads who want to instill fear into the masses).
There's a lot to contemplate the rest of this weekend beyond concerning interest rates, the economic outlook for the third quarter: wait - I'll think of other worried tomorrow.
Stay tuned, stay calm and don't let fear and greed drive your investment actions.
~Barry Unterbrink
Many stock were halted for trading only a few minutes after they opened at 9:30 a.m. then after they did open later in the morning prices zoomed upward with the demand, creating some wide price swings.
For instance, Facebook shares traded at 72 early on and closed at 82. Apple was traded at 92 just after 9:30, and ended the session at 103. Verizon at was on sale at 38, to close at 44. These are big, institutionally traded, household name companies, and a lot of investors are upset that they did not have a chance to buy or sell at these prices. Welcome to the imperfect world of Wall Street.
I came across an interesting statistic on markets from a year ago blog. In the past 10 years, there is a one in 20 chance that stock prices will fall 5% in any given month. If they do, the average decline to the bottom of that cycle is a 12% loss. Stocks have fallen 10% so far in August as measured by the S&P 500 index. So on an average historical basis, the selling might be over. That's just the average (mean) of the fall, however. This 6 year bull market in stock prices we knew would end sometime. We were perhaps surprised that it would take only a week or so to play out (hopefully).
In the six trading days ended today, bonds and gold did help immensely in mitigating stock price declines - the box score: stocks -9%, bonds +2% and Gold +3.4%. Funny but you only hear the doom and gloom on the news reports on stocks (including CNBC, and the talking heads who want to instill fear into the masses).
There's a lot to contemplate the rest of this weekend beyond concerning interest rates, the economic outlook for the third quarter: wait - I'll think of other worried tomorrow.
Stay tuned, stay calm and don't let fear and greed drive your investment actions.
~Barry Unterbrink
Barry Unterbrink is a fee-based Chartered Retirement Planning Counselor and wealth manager since 1982. As a second generation manager after his father Larry (1934-2021), they managed institutional pension funds totaling $100 million.Both are former Investment Advisory Presidents and financial newsletter publishers.
Thursday, August 20, 2015
Gold, Bonds Helping Balance the Scales, Protect Assets
20-August-15
Gold and Bonds are protecting diversified portfolios that include stocks
Since the market's top in Mid-May near Dow 18,300 - Gold and Long Term Bonds (UST) have offset each other: Gold down 6%, Bonds +6%. However, the tide has turned greatly thus far in August, as Gold has gained about $60 an ounce, or 5%, Silver, up 5%, and Bonds +2%.
Thru mid-day, stocks are lower by about 3% this month. Can this rally in the precious metals continue? Stay tuned for more thoughts on that.
Gold and Bonds are protecting diversified portfolios that include stocks
Since the market's top in Mid-May near Dow 18,300 - Gold and Long Term Bonds (UST) have offset each other: Gold down 6%, Bonds +6%. However, the tide has turned greatly thus far in August, as Gold has gained about $60 an ounce, or 5%, Silver, up 5%, and Bonds +2%.
Thru mid-day, stocks are lower by about 3% this month. Can this rally in the precious metals continue? Stay tuned for more thoughts on that.
Barry Unterbrink is a fee-based Chartered Retirement Planning Counselor and wealth manager since 1982. As a second generation manager after his father Larry (1934-2021), they managed institutional pension funds totaling $100 million.Both are former Investment Advisory Presidents and financial newsletter publishers.
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