By Michael Lombardi, MBA | October 15, 2014
Now that the Dow Jones Industrial Average has fallen 1,035 points (six percent) from its mid-September peak, the question investors are asking is “how far will she go?” For small-cap investors, the drama is greater, as the Russell 2000 Index has fallen 12.5% from its July peak.
Since 2009, every market pullback presented investors with an opportunity to get back into stocks at discounted prices. Even some editors here at … Read More
By Mitchell Clark, B.Comm. | September 19, 2014
Getting a sense of where stocks are going to go in the year ahead is always difficult with the major indices at their all-time highs.
The fundamental backdrop is still very favorable for equities. While the Federal Reserve has put off raising interest rates for the near future, the cost of capital, especially for corporations, remains extremely low. And corporate balance sheets remain in excellent condition with strong cash positions … Read More
By Michael Lombardi, MBA | July 25, 2014
According to the U.S. Congressional Budget Office, next year, the government is expected to incur a budget deficit of $469 billion and then another budget deficit of $536 billion in 2016. (Source: Congressional Budget Office web site, last accessed July 21, 2014.) From there, the budget deficit is expected to increase as far as the projections go.
Yes, the government’s own estimates are that our country will run a budget … Read More
By Michael Lombardi, MBA | June 27, 2014
We are hearing more and more about interest rates getting ready to rise. The Federal Reserve itself has said it expects the federal funds rate to increase to 1.5% by the end of next year and to 2.25% by the end of 2016.
Before the Fed came out with its forecast, I was writing about how the Fed will have no choice but to raise interest rates because inflation is … Read More
By Mitchell Clark, B.Comm. | June 26, 2014
Everything in the stock market experiences its own cycle of enthusiasm among investors. And this is especially well illustrated among speculative issues.
There was a time only a few years ago when some of the hottest speculative stocks were in solar energy. Now this small equity universe is still trying to rebuild itself.
And in more recent history, 3D-printing companies experienced incredible capital gains, only to experience incredible capital losses … Read More
By Michael Lombardi, MBA | June 25, 2014
I’m going to put aside my daily ranting about the stock market and the economy today to bring what I believe is an important story to the attention of my readers.
There is no doubt you’ve heard about how poorly the city of Detroit, Michigan is faring now that the automotive sector has all but closed up there.
Yesterday, news came that the city has started cutting off water to … Read More
By Mitchell Clark, B.Comm. | June 18, 2014
It’s a difficult environment in which to be constructing new equity portfolios right now, mostly due to the very simple reason that the stock market is at an all-time record high and it’s likely that monetary policy will change soon.
But there is still a great deal of interest in equity securities and in a lot of cases, individuals require the income that they provide.
There are a lot of … Read More
By Mitchell Clark, B.Comm. | June 13, 2014
With the Dow Jones hitting 17,000 being pretty likely in the not-too-distant future, from there, it’s only another 18% or so until the Dow hits 20,000, which is pretty incredible.
These numbers seemed so unrealistic just a few years ago but now, it’s not too farfetched. The most amazing thing to me is that stocks still haven’t experienced a material price correction since the financial crisis.
Stocks aren’t necessarily stretched … Read More
By Mitchell Clark, B.Comm. | June 4, 2014
The Dow Jones Transportation Average keeps powering ahead, and the rest of the stock market is very close behind it.
The strong performance of this index is confirmation of further Dow theory gains. The Dow Jones Industrial Average has been fighting its way higher since May 20.
Some of the performances of transportation stocks have been truly spectacular and very much a reflection of a bull market.
Alaska Air Group, … Read More