Financial Matters

Tips and news from the financial experts at Attentive Investment Managers.
Jan
13

2019 Q4 Newsletter

q4

Mike and I recently reflected on the past decade of the markets, and now that the New Year has come and gone, we can set our sites ahead for the future. The week of January 6th will be the first full week of trading after our holiday hangover. Market sentiment is a mixed bag and it appears that everyone has a wait and see attitude – this is a juxtaposition of where we were this time last year.

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Dec
24

Santa Rally

santa_rally

Santa baby, slip a sable under the tree for me
Been an awful good girl
Santa baby, and hurry down the chimney tonight

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Dec
03

Harvesting Losses

tax-loss-harvesting

Recently, we have experienced a downturn in the markets and while that is frustrating and, at times, downright scary, there are ways that you can take advantage of these tough times. Tax-loss harvestingnot only can decrease your tax liability exposure by offsetting taxable income, it also allows you to indirectly increase your overall return or have the ability to reap the gains from some of your other investments.

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Oct
05

2017 3rd Quarter Report

third-quarter

The last few years of a bull market are always a bit of a mystery to professional investors; the market rises faster than it did in the early, cautious years when nobody believed there WAS a bull market, even though there appear to be fewer fundamental or economic reasons for it. The current bull market churns on, even if nobody can explain it, and people who bail out in anticipation of a downturn do so at the risk of missing out on an untold number of months or years of (still somewhat inexplicable) gains. As nice as the returns have been domestically, international stocks this year have been even kinder to investment portfolios.

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Jul
06

Quarterly Newsletter: 2017 Second Quarter Report

The U.S. stock market has more than tripled in value during the runup that started in March 2009, and the most recent quarter somehow managed to accelerate the upward trend. We have just experienced the third-best first half, in terms of U.S. market returns, of the 2000s. By any measure, this represents a strong first half of the year, driven by the S&P 500 tech sector, biotech firms and information technology companies generally. What is interesting is that investors appear to be flooding into these business categories because they are the ones most likely to grow their sales even if the economic environment were to turn sour—which suggests a growing bedrock of pessimism about future economic growth among seasoned investors. Is that justified? Economic growth was admittedly meager in the first quarter—U.S. GDP grew just 1.4% from the beginning of January to the end of March, a figure that was actually revised upwards from initial estimates of 0.7%. That represents a slowdown from ...
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Mar
21

Clear Long-Term

Clear Long-Term

The Federal Reserve has once again raised interest rates by 25 basis points, but is still maintaining their placid stance toward economic policy. This allowed equities last week to end a tumultuous week with a slight uptick. The expectation is that the Fed is going to continue to raise rates very slowly.

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Mar
02

Greece’s Return to the Headlines

Greece’s Return to the Headlines

As you can see from the graph, the nation of Greece, once the subject of almost daily speculation about the viability of its government bonds, has pulled its economy out of a disaster into a muddle. No doubt, you got tired of hearing about Grexit scenarios and all the times when the European Central Bank and the European Stability Mechanism came to the rescue.

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Dec
15

Higher Rates: The Tempest in the Teapot

Higher Rates: The Tempest in the Teapot

Anybody who was surprised that the Federal Reserve Board decided to raise its benchmark interest rate this week probably wasn't paying attention. The U.S. economy is humming along, the stock market is booming and the unemployment rate has fallen faster than anybody expected. The incoming administration has promised lower taxes and a stimulative $550 billion infrastructure investment. The question on the minds of most observers is: what were they waiting for?

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Aug
25

Costs of Living

Costs of Living

What is a dollar worth?

If you answered that it's worth a dollar, you must be living in Illinois. A research report by U.S. Bureau of Economic Analysis found that the prices for a particular basket of goods and services—food, transportation, housing and education—are higher in some states than others. Illinois came in at almost exactly the average; a $100 bill will buy $100.70 worth of the items. People living in the District of Columbia, the nation's most expensive area, would have to pay, on average, $118.10 for the same basket of items.

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Apr
13

2016 First Quarter Report: The Bear That Wasn’t

2016 First Quarter Report: The Bear That Wasn’t
The first quarter of the new year has brought us small positive returns in many of the U.S. market indices, which means that investors survived—for now, at least—the worst start to a calendar year ever for the U.S. stock market. The easy call at the beginning of the year would have been to bail out when the markets were declining and sit out the widely-predicted start of a painful, protracted bear market. Some analysts were talking openly about another 2008-9 drop in share prices. But 10% market declines are simply a part of the market's normal turbulence, and anyone who spooks as soon as they see a month of bearish sentiment is likely to miss out on the subsequent gains. Since hitting their 2016 lows on February 11, both the S&P 500 index and the Nasdaq Composite have gained roughly 13% in value.That doesn't guarantee that there will be gains going forward, however. The Market Watch website reports that half of the S&P 500 sectors are reporting decline...
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Feb
12

Don’t Try to Catch a Falling Knife

Don’t Try to Catch a Falling Knife

There has been much discussion over the last month and half about Bear Markets, Sell-offs, the Global economy and a possible Recession. The vast majority of analysts believe we are not in a recession (neither the U.S., China, nor Europe) and that most economic indicators seem to point to the fact that overall the U.S. economy is strong. In fact, most analysts indicate that there is only a 20 -30% chance of a recession in the making for the U.S. In addition, trucking and retail industries are showing signs of stabilization indicating that things did not get worse in January. The factors that are seemingly the 'cause' of this downturn are angst surrounding global growth, politics, oil and Euro banking woes and each day one or another have been blamed for the sell-off during this downturn. However, none of them should be a catalyst for the down market indicating a true disconnect between reality and what investors in the market are thinking. It is important to note that when investors are buying in huge rallies it's traditionally thought the market has created a herd mentality however, when they are selling in bulk during downturns there is an assumption they are right.

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Jan
19

The Great Panic of 2016

The Great Panic of 2016
Wow! There's no diplomatic way to say this: the global stock markets are in panic mode right now. In two weeks of trading, the U.S.S&P 500 index is down 8% on the year, which brings us close to correction territory (a 10% decline), and has some predicting a bear market (a 20% decline). On top of that, we've been hearing a widely-publicized, rather alarming prediction from Royal Bank of Scotland analyst Andrew Roberts, saying that the global markets "look similar to 2008."  Mr.Roberts is also predicting that technology and automation are set to wipe out half of all jobs in the developed world. If you listen closely out the window, you can almost hear traders shouting "Sell! Head for the exits!"When you're in the middle of so much panic, when people are stampeding in all directions, it's hard to realize that there is no actual fire in the theater.  Yes, oil prices are down around $30 a barrel, and could go lower, which is not exactly terrific news for oil companie...
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Jan
11

2015 Year End Report:

2015 Year End Report:
​In the past year, we experienced many things—a prelude to a Presidential election, a renewal of terrorist concerns,—but in the investment markets, we will look back and yawn. Despite some entertaining ups and downs, particularly in the third quarter of the year, the markets ended pretty much where they began, eking out small gains and losses pretty much across the board. The final three months of the year provided investors with gains that were tantalizingly close to wiping out the losses of the previous three quarters. What's going to happen in 2016? Of course, nobody knows with any degree of certainty. But many professional investors are approaching the new year with an unusual degree of caution. By most metrics, U. S. stocks are slightly pricier than their historical averages. That doesn't mean they can't get more so, but it seems unlikely that people will pay a lot more for a dollar of earnings in the coming year than they will today. Meanwhile, economic growth is moderate at best...
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Sep
08

Exit or Seek Opportunity

Exit or Seek Opportunity
Recent turmoil in financial markets, rising pessimism about Chinese and emerging markets growth and a renewed slump in oil prices have fueled fears that the global economic recovery is faltering. While the world economy does face several challenges, we remain convinced that the United States and Europe are on an upward growth trajectory. China is a wildcard, but while growth is slowing there, it should stabilize. We do not foresee current equity market weakness morphing into a bear market. Bear markets typically occur against a backdrop of recessions that produce significant declines in corporate earnings. Earnings have wavered this year, but we believe this is mainly due to a profit crunch in the energy sector and the sharp rise in the U.S. dollar. The negative impact of both of these factors should fade in the coming quarters, allowing earnings to improve. Additionally, monetary policy should stay accommodative even when the Fed starts raising rates. If the Fed were only focused on t...
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Aug
23

"Don't Panic"

"Don't Panic"
It appears as though the correction we've been anticipating and talked about for the last couple of quarters is now upon us. Since July there has been quiet erosion in the equities markets, becoming what many have called a 'landslide' or 'free fall'. As of Friday, the S&P was down 7. 7% and the Dow down 10. 3%. Although, we understand stock market declines are emotional and anxious periods of time we would like to remind you, this was expected. The market has gone 46 months without a correction which is substantially over the 18 month normWe urge you to not succumb to downside and sell, we have spent much time positioning your portfolio to mitigate the downside risk as much as possible based on your risk tolerance.We DEFINITELY don't think this is a prelude to another 2008-style market decline. Leading indicators are still positive and lower oil prices and interest rates should help stabilize growth. One key takeaway is that the downturn and the selling in the last 4+ days has rest...
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Mar
15

Sound and Fury

Sound and Fury
For all the drama we've experienced in the past few months and disturbing but ultimately not harmful news in Europe, China and Puerto Rico, the second quarter of the new year has brought slightly positive returns in many of the U. S. and global indices,. For the second consecutive quarter, investors experienced a mild roller coaster of up and down days in the U.S. and global markets, small panics and surprising rallies that ultimately cancelled each other out in what trading professionals refer to as a sideways market. For the second consecutive quarter, investors are looking over their shoulders at interest rates, waiting for the Federal Reserve Board to finally take its foot off of interest rates, for bond yields to jump higher, making bonds more competitive with stocks and triggering an outflow from the stock market that could (so the reasoning goes) cause a bear market in U. S. equities. But of course investors have been waiting for this shoe to drop for the bet...
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Feb
16

Just a Quick Update from AIM

Just a Quick Update from AIM
We expect equities to continue to trade sideways as investors await more clarity about the economic outlook. In our view, the first half of the year's weakness was an anomaly, and better growth lies ahead. Global growth is also improving. While risks are inherent, we believe the positives outweigh the negatives. The main wildcard is what will happen when the Fed raises rates, which we think will be more likely in September rather than this week. Having said that, we do not think the backdrop will turn overly punitive for stock prices when this does happen.Equities have remained remarkably resilient this year, pushing ahead modestly in the face of rising uncertainty. Volatility is likely to remain elevated, and we expect some sort of consolidation or downturn at some point. Over the longer term, however, modestly improving growth, still-accommodative global monetary policy and relatively attractive valuations argue for retaining overweight positions in equities. As we've previously ment...
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Jan
15

Stop Awaiting the Fed

Stop Awaiting the Fed
The first quarter of the new year has brought us small positive returns in many of the U. S. and global indices, and more than the usual amount of anxiety along with them. Meanwhile, global markets are showing signs of life. If you were watching the markets day to day, you experienced a mild roller coaster, what trading professionals refer to as a sideways market. One day it was up, the next down, each day (or week) seeming to erase the gains or losses of the previous ones. The best explanation for this phenomenon is that investors are still looking over their shoulders at interest rates, waiting for bond yields to jump higher, making bonds more competitive with stocks and triggering an outflow from the stock market that could (so the reasoning goes) cause a bear market in U. S. equities. However, investors have been waiting for this shoe to drop for the better part of three years, and meanwhile, interest rates have drifted decidedly lower in the first quarter.This inter...
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