Up, Up and Away?

Please be very mindful when adding capital to this market. This market could prove to be great for long-term dollar cost averaging.

This is the chart of the S&P 500 back to 1970. If you're like me, I wonder how much higher this uptrend can continue. Once the Fed starts raising interest rates, will money come trickling or pouring out of the bond market to push this market even higher? Will the yield curve flatten and will capital start exiting stocks hoping to find better appreciation/preservation potential in bonds?

And then we learned this from Michael Harris at the Price Action Blog. "It may be seen that other than the 29-day pattern that formed in the beginning of this year, similar patterns with duration of more than 23 days have formed only during downtrends and large corrections,” Harris wrote. He noticed how many days the S&P 500 has gone since it has posted back-to-back gains. His conclusion is that either we’re in the midst of a large correction, or — disclaimer — the dynamics have changed and this is an exception.

Fees-How Much Do You Pay? Do You Consider the Vanguard Effect?

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Retirement in America

Another infographic showing how little Americans have saved for retirement. Here is the full article

Meanwhile, the median amount that Americans under 65 with retirement accounts had saved was just $50,000, according to a report released in March by the National Institute of Retirement Security...Nearly 40 million working-age households (that’s 45% of households) do not have any retirement account assets like a 401(k) or an IRA, NIRS revealed.

Bull vs Bear

If you've been reading this blog, then you know my favorite bull strategist is Brian Belski, BMO. I've also been fascinated by the more bearish, Peter Eliades. They've both been recent guests on CNBC and sure enough they are on different sides again. Markets move in mysterious ways, but technically we broke down significantly this summer. For me to go bullish at this high point --after a huge rally since March 2009-- we need to get above 2200 on the S&P for two quarters in a row, but no one is paying me for my opinion and maybe you get what you pay for...that said, I anticipate this market to peak for the next two years between now and the end of Q1.

Brian's take.

Peter's take.

Time will tell who is right.

Please consult a qualified financial advisor before making any investment decisions. This blog is for educational purposes only and does NOT constitute personal advice.

Allocations, Returns, and Market Cycles

Market volitility may be increasing soon. Many observers believe we are preparing for a market peak in 2015 to 2016 (i.e. Peter Eliades, June 16, 2016, go to minute 25). Others who are more bullish imagine the beginning of a new 20 year bull market, which started in March 2009 (Brian Belski, BMO). The reality is there is no perfect investment and a low probability that anyone can consistently, accurately time when to be in and out of the market (John Hussman, weekly comments). Investing experience requires many skills, but also a bit of luck for many investors. Being able to dollar cost average into a market for multiple decades without an unlucky patch of a job loss, divorce, health issue or other item that derails your plan is a sign of discipline and luck. Paul Merriman has created this table to show you how various allocations have impacted investors' returns since 1970. Many can argue the sample size is too small, but it also includes many different market environments. If your allocation shows too much downside risk, maybe it is time to work with your financial advisor to reallocate. Paul leaves us with this quote:

This is always true: We cannot know in advance the best time to invest our money nor the best time to withdraw our money. The best guidance I can give is to invest money when it's available and withdraw it when you need it.

Please consult a financial advisor before making any changes to your portfolio. This blog is for information purposes only and does not constitute individual investment advice.

Another Look at Net Worth in America

Meanwhile, the rest of the country’s net worth has actually fallen since the Great Recession — and has yet to recover. The net worth of American families — that is, the difference between the values of their assets, including homes and investments, and liabilities — fell to $81,400 in 2013, down slightly from $82,300 in 2010, but a long way off the $135,700 in 2007, according to a report released last January by the nonprofit think tank Pew Research Center in Washington, D.C. That means that, even though the Great Recession is officially over, Americans are still around 40% poorer than they were in 2007, the year before the global financial crisis. The median net worth of white households was $141,900 in 2013, down 26% since 2007. It declined by 42% to $13,700 over the same period for Hispanic households and fell by 43% to $11,000 for African-American households.

Active Management

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Median P/E's Show Valuation Issues

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Net Worth in America

This is more proof we have a retirement crisis in America. USA Today shows us the net worth of American households as of 2011. While average net worth has probably grown since 2011, it is interesting to learn how our net worth compares to households in the United States. These numbers don't paint a pretty picture for our future. From the article, here are the 50th percentile net worth figures by age group:

Under 35 Net worth $6,682

35 to 44 Net worth $35,000

45 to 54 Net worth $84,542

55 to 64 Net worth $144,200

Over 65 Net worth $171,135

Sources: Census Bureau, The Motley Fool, George Petras, USA TODAY Article

Student Loan Data for United States

Read this if you want to get a better understanding of the student loan situation in America. The full report has many interesting graphs and charts.