Posts Tagged ‘Sovereign Debt’
It is a phrase that’s pertinent to the stock market.
Without question, I remain completely taken aback by what has transpired with the stock market since the beginning of the year.
Looking at the numbers, not being invested in many corporations has been costly.
Excluding the reasons why, the simple fact is that the Dow Jones Industrial Average is up 16% since the beginning of the year (not including dividends).
The S&P 500 is up 15.7%. The NASDAQ Composite is up 14.8% and the Russell 2000, an index of small-caps, is up 16.6% (not including dividends).
I think this stock market can smell the end of quantitative easing.
More meaningful, however, is the Federal Reserve’s policy regarding interest rates, which are going to continue to be low for the near future, as it has been made very clear.
This is a huge, perhaps neglected, certainty for the stock market and corporations.
Making the case for being a buyer in this market is extremely difficult. Institutional investors have already placed their bets and a lot of corporations—good companies with real staying power and solid prospects for earnings growth going forward—are fully priced.
Johnson & Johnson (NYSE/JNJ) is a benchmark stock. Like many large corporations, Johnson & Johnson does everything it can to squeeze every penny out of its bottom line. The company lays off employees, closes plants, and does everything to minimize taxes. Johnson & Johnson’s 10-year stock chart is featured below:
Chart courtesy … Read More
The stock market is close to double-digit growth so far this year, as corporations continue to report modest earnings results.
Playing a market at an all-time high is tough. It makes me think a lot more about risk, portfolio strategy, and how to consider new positions—if any at all.
As a stock market investor/speculator, here are five motivations to keep in mind:
When you buy one share of common stock in a corporation, you are officially a businessperson. You are the CEO of your own investment corporation—the pinnacle of capitalism. In order for any business to be successful over time, it must do what works. You can have a view, you can be totally outraged, but doing what works is what makes money. Buying, selling, and speculating in the stock market is business. Approach it as such.
2. Risk and Control
Investment risk is more important than potential return in any transaction. There is no rush to get in—ever. Be deliberate, cautious, diversified, informed, and skeptical. Most people would not go out and purchase a home or a company in an unfamiliar jurisdiction without doing a lot of research. The stock market is a secondary market. The founders of a listed corporation have already sold. As a businessperson, think constantly about how all the fundamentals in the world can hurt each one of your holdings. Risk in your portfolio is always something you wished you had spent a lot more time on after a shock.
3. Stock Market Action
Doing what works makes money. Being an individual investor, everything in the marketplace is beyond your control: the money … Read More
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