Since I have a lot of clients and readers who are age 50 and above, I thought this article was very appropriate to share:
Basically, because interest rates are so low these days, the fraudsters and scammers are taking advantage of people seeking higher fixed returns on their investments. As the saying goes, “If it sounds too good to be true…it probably is.”
Stay smart and be safe!
Cheers,
Jason Wenk
If you’ve turned on financial television or opened the financial section of your local paper, you probably know the stock market has dropped a few percent the last few days. You also probably know that gold has plummeted (about 12% since last week).
Why did these drops happen? What happens next? That’s what I’m covering in today’s video market update.
Despite the recent woes of stock and commodities investments, if you’ve followed my posts on the blog, you already knew this was likely to happen. Further, if you’re following a well diversified, conservative investment plan – these recent drops haven’t impacted your portfolio at all 
.
I’m working on a pretty in depth review of the current market rally, including some forecasts for the rest of the year. Hopefully that post will be complete over the weekend. Until then, I thought I’d at least provide a primer on the current market trend.
Below, you’ll find a S&P 500 chart that shows the “channel” stocks have been moving in as of late. As you will see, it’s been a pretty good run.
However, the market has been getting overbought for a couple weeks. I suspect, at minimum, a pull back is due.
Just click on the image for a full size view.
Yesterday (and now today) the Dow Jones Industrial Average hit a new All-Time high. This new high comes after the previous high was hit in October of 2007, about 5 1/2 years ago.
I was wondering the same thing, so using my extreme geekery, did a little research on past market highs. What I wanted to know, was what happens the next 12, 24, and 36 months afterward (historically speaking).
Marty McFly would be happy to know that new all-time highs are mostly very good for investors. No Delorean Necessary.
I’m sure more news will become available daily (or even hourly) – but I just got this in my email and thought I’d share:
http://www.scholtenfant.com/2013/01/estate-tax-alert/
My friends over at Scholten Fant Attorneys let me know that there are major changes to Estate Taxes, and they look very good on the surface. Check out the full article on their website for details, the link is above. As more news becomes definitive I’ll be sure to share that also.
Happy 2013 everyone, may it be a most blessed year for all.
Cheers,
Jason Wenk
With no agreement in place to avoid the “fiscal cliff” financial markets have taken a hit. In today’s video market update I show where the trends are, but more importantly discuss how despite the trend a fiscal cliff plan will ultimately either send the market up or spiraling down.
In the end, no agreement reached this year will solve the long term problems with the US national debt or really make much of a short term impact in our budget deficit. An agreement could, however, at least buy some time from what could otherwise be an economic disaster.
Chat soon,
Jason Wenk
Each month I calculate the strength of the US economy using a math based model I call RPA (Recession Probability Analytics). When the number rises above 50 it means the US economy is in the bottom 50% of all economic conditions relative to it history.
While far from perfect, the model has had an uncanny ability to correlate (negatively) with stock market returns. In other words, when the model moves above 50 the S&P 500 has fallen over 25% and when it is below 50 the S&P 500 has risen over 30%. I began publishing the model in November of 2007.
Here’s the full history of RPA from inception:
| Month/Year | RPA | S&P 500 | S&P Return | Growth of $100,000 if exiting S&P 500 for month after RPA moves above 50 |
|---|
Since I’ll be unable to post next week I thought this quick 6-minute video update would be helpful. The stock market has sort of been stuck in a range now for the past 3 months, ultimately providing volatility but no meaningful gains or losses to speak of. For the 4th quarter the S&P 500 is down just a hair, but I think a decisive move is on the horizon.
In this video I walk through the current range and where a breakout (either good or bad) is likely to occur.
Holiday Cheers,
Jason Wenk
According to Biryini Associates the S&P 500 has risen 76% of the time from the day after Thanksgiving through year end. This phenomenon is known as a “Santa Claus Rally” as stock markets typically only go up about 55% of all calendar months. There is actually quite a bit of truth (at least on the surface) to Santa’s Rally as looking at the last 40 years December is the best performing month for stocks with an average return of 1.71%.
“There are three types of lies: Lies, damn lies, and statistics” – Benjamin Disraeli
While December as a whole has been a good month, it’s not without plenty of pretty bad times too. Consider some of these years:
Each month I calculate the strength of the US economy using a math based model I call RPA (Recession Probability Analytics). When the number rises above 50 it means the US economy is in the bottom 50% of all economic conditions relative to it history.
While far from perfect, the model has had an uncanny ability to correlate (negatively) with stock market returns. In other words, when the model moves above 50 the S&P 500 has fallen over 25% and when it is below 50 the S&P 500 has risen nearly 27%. I began publishing the model in November of 2007.
Here’s the full history of RPA from inception:
| Month/Year | RPA | S&P 500 | S&P Return | Growth of $100,000 if exiting S&P 500 for month after RPA moves above 50 |
|---|
Welcome to the blog of Jason Wenk; author, quantitative investment systems developer, and investment advisor.
On this site I mix business, my latest research, and a little bit of my family life. The goal is to make an impact with knowledge, but also let the world know there's more to me than just my work.
