Market insights and analysis

How dynamic, risk-managed investment solutions are performing in the current market environment

1st Quarter | 2021

Market insights and analysis

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Updates on how dynamic, risk-managed investment solutions are performing in the current market environment.

Last week, the gold spot price was down 4.58% and the U.S. Dollar Index was up 1.85%.

U.S. equity markets posted losses in two of the three indexes last week. The NASDAQ Composite gained 1.11%, the S&P 500 lost 0.63%, and the Dow Jones Industrial Average lost 1.75%.

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Over 2,500 years ago, in what may have been one of the earliest examples of behavioral finance theory, ancient Greek philosopher Aristotle is reported to have said the following regarding the achievement of success.

Market Update 9/21/20

The major stock market indexes were mixed last week, with some further consolidating gains seen this year. The NASDAQ 100 Index (the laggard for the week) was down 1.4%, the S&P 500 Index fell 0.6%, the Dow Jones Industrial Average lost 0.03%, and the Russell 2000 gained 2.6%. The 10-year Treasury bond yield rose about 3 basis points, as Treasury bonds fell slightly for the week. Last week, spot gold rose slightly, gaining 0.4%.

Gold and politics

Last week, we noted that gold’s price consolidation had completed a “pennant” formation.

Some of you may be surprised at how the Dow is performing compared to the other major stock market indexes—not only this year, but also over the past one year and three years.

Market Update 9/14/20

The major indexes posted losses last week. The NASDAQ finished the week down 4.60%, the S&P 500 lost 2.51%, the Dow Jones Industrial Average was down 1.66%, and the Russell 2000 small-capitalization index lost 2.48%. The 10-year Treasury bond yield fell 5 basis point to 0.67%, as Treasury bonds rose for the week. Last week, spot gold closed at $1,940.55, up 0.34%.

“Fiddler on the Roof” is one of the most enduring musicals written. It first previewed here in Detroit in 1964, and I’m sure regional or touring companies will continue performing it in the future for many years to come. And, of course, the movie version is always available!

Dollar woes

Gold closed last week at $1,947.90 per ounce.

August ETF Deathwatch contains 377 zombie ETFs and ETNs.

Market Update 9/8/20

The major stock market indexes posted strong losses this week, consolidating some of the gains seen this year. The NASDAQ 100 (the laggard for the week) was down 3.1%, the S&P 500 Index fell 2.3%, the Dow Jones Industrial Average fell 1.8%, and the Russell 2000 fell 2.7%. The 10-year Treasury bond yield rose about ½ of a basis point, as Treasury bonds rose for the week. Last week, spot gold also fell somewhat as investors locked in returns, losing 1.6%. Year-to-date, the NASDAQ 100 is still up over 33% and gold is up over 27%, highlighting how well these asset classes have done.

It was over 30 years ago. I sat in a pew in a little church on the village green of Franklin, Michigan. It was the usual Sunday service, but I was stirred by the sermon from a minister who was still relatively new to me.

Gold continued to consolidate around $1,950.00 per ounce last week, closing at $1,934.30 per ounce on Friday. This extended consolidation pattern provides a buying opportunity in the current gold bull market.

Why is the stock market so disconnected from what is happening in the economy? And why does it seem like all stocks—no matter what their quality—are going up?Just like you, we grapple with these complex market questions every day in our quest to bring investors better risk-managed investment solutions. These two are the ones I’ve been asked most frequently recently—which makes sense. It does seem like the market is acting illogically … but is it? Let’s take a closer look to see what’s behind it all.

Market Update 8/31/20

The major stock market indexes posted strong gains last week. The NASDAQ 100 (the leader for the week) was up 3.8%, the S&P 500 Index rose 3.2%, the Dow Jones Industrial Average gained 2.6%, and the Russell 2000 (the worst performer for the week) gained 1.7%. The 10-year Treasury bond yield rose about 9 basis points, as Treasury bonds fell slightly for the week. Last week, spot gold continued its move upward, rising 1.3%. Lately, the metal has performed more as an inflation hedge than a safe-haven asset. It is up nearly 30% year to date.

Gold continued to consolidate around $1,950.00 per ounce last week, closing at $1,974.90 per ounce on Friday.

It’s been 51 years since we have brought a new puppy into our household. Don’t get me wrong. We love dogs and have had quite a number over the years. But it took five decades—during which we rescued many young adult dogs—before we decided we would try adopting a six-month-old puppy again.

The major indexes posted mixed performance last week. The NASDAQ finished the week up 2.65%, the S&P 500 gained 0.72%, the Dow Jones Industrial Average was flat, and the Russell 2000 small-capitalization index lost 1.61%. The 10-year Treasury bond yield fell 8 basis point to 0.63%, as Treasury bonds rose for the week. Last week, spot gold closed at $1,940, down 0.24%. Most notably, the S&P 500 traded above pre-pandemic highs set in February. This was the fastest bear market and second-fastest bear market recovery in U.S. history.

Last week, gold bounced back after a down week, reaching $2,000 per ounce before closing at $1,947 per ounce.

Since I began investing in the late 1960s, I have always been in the active investing camp. When I started Flexible Plan Investments, Ltd., in 1981, the only investment services we offered were active management (and that is still true today). I thought an investment manager should be “flexible” rather than locked into a rigid buy-and-hold approach.

The major stock market indexes finished up last week. The Dow Jones Industrial Average gained 2%, the S&P 500 Index rose 0.7%, the NASDAQ Composite gained 0.08%, and the Russell 2000 small-capitalization index gained 0.55 %. The 10-year Treasury bond yield rose 17 basis points, as Treasury bonds lost nearly 0.9% for the week. Last week, spot gold closed at $1,945.12, down $90.43 per ounce, or 4.4%.

After setting new highs by breaking $2,000 per ounce the previous week, gold prices retraced, closing at $1,949.80 per ounce last week.

Along with jigsaw puzzle purchases, the number of new people engaging in gardening has increased this year, as we spend more time at home due to the pandemic. As Rutgers University professor, Joel Flagler explains it, “There are certain, very stabilizing forces in gardening that can ground us when we are feeling shaky, uncertain, terrified really. It’s these predictable outcomes, predictable rhythms of the garden that are very comforting right now.”

ETF Deathwatch

July ETF Deathwatch contains 391 zombie ETFs and ETNs.

The price of gold climbed well past $2,000 per ounce last week, closing at $2,028 per ounce. Gold’s year-to-date gain as of August 7 was over 28%.

This year has been somewhat like a master class, or real-time laboratory, in illustrating some classic concepts of behavioral finance in a compressed time frame. Think about it.

Most of the major stock market indexes gained last week. The S&P 500 Index was up 1.72%, the NASDAQ gained 3.69%, and the Russell 2000 small-capitalization index rose 0.88%. The Dow Jones Industrial Average was the only loser for the week, falling 0.16%. The 10-year Treasury bond yield fell about 6 basis points, as Treasury bonds gained slightly for the week. Spot gold gained more than 3.89% for the week.

Gold set new all-time highs last week, finishing at $1,985.90 per ounce. The precious metal is now in position to reach $2,000 per ounce.

The major stock market indexes fell last week. The Dow Jones Industrial Average lost about 0.75%, the S&P 500 Index fell 0.28%, the NASDAQ 100 dropped 1.52%, and the Russell 2000 small-capitalization index fell 0.39%. The 10-year Treasury bond yield fell about 4 basis points, as Treasury bonds gained ground for the week. Last week, spot gold gained more than 5%, behaving like a safe-haven asset as stocks took a break from their recent climb.

This column has explored the topic of risk management in some detail over the years, addressing several questions: • Are the retail investor and financial adviser underserved by the buy-and-hold philosophy? • What is the potential role of dynamic risk-managed strategies in investors’ portfolios? • How might modern, risk-managed portfolios be best constructed on a conceptual level?

Gold rose over 4.5% last week, approaching all-time highs in both spot prices and continuous futures contracts.

For more than four decades, I have been a professional in the investment business. Some may be surprised to find out, however, that finance wasn’t my first chosen career path.

The major indexes posted mixed performance last week. The S&P 500 gained 1.25%, the Dow Jones Industrial Average rose 2.29%, the NASDAQ lost 1.08%, and the Russell 2000 small-capitalization index gained 3.57%. The 10-year Treasury bond yield fell 1 basis point to 0.63% as Treasury bonds rose slightly for the week. Last week, spot gold closed at $1,810, up 0.65%. Optimism about the coronavirus vaccine and positive economic data were the primary drivers behind investors’ short-term decision-making last week.

Gold prices closed slightly up at $1,810.00 per ounce on Friday (July 17), as the bull market continued for the precious metal.

The major stock market indexes finished mixed last week. The Dow Jones Industrial Average gained 0.9%, the S&P 500 Index rose 1.7%, the NASDAQ Composite climbed 4.0%, and the Russell 2000 small-capitalization index lost 0.6%. The 10-year Treasury bond yield fell 3 basis points, as Treasury bonds gained ground for the week. Last week, spot gold closed at $1,798.70, up $23.32 per ounce, or 1.3%.

Businesses around the world have seen their sales dry up as people have restricted their movement in the wake of the pandemic. There has been much talk about how Amazon and other online retailers have bucked the trend. Another segment of the retail marketplace has also been thriving despite the virus fears.

Equities rallied in the second quarter after a pandemic-related sell-off in the first quarter. About 84.6% of OnTarget Monitors for the quarter were “in the yellow” or better, with 70.4% “OnTarget” (“in the green”) or better (“in the blue”).

Gold prices hit $1,829.80 per ounce last week, a nine-year high, before closing the week at $1,801.90 per ounce.

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June ETF Deathwatch contains 381 zombie ETFs and ETNs.

Last week, equity markets pushed higher, capping the shortened holiday week. The Dow Jones Industrial Average rose 3.20%, the S&P 500 gained 4.0%, the NASDAQ finished the week up 4.6%, and the Russell 2000 small-capitalization index locked in 3.85%. The 10-year Treasury bond yield rose 3 basis points to 0.67%, as Treasury bonds declined for the week. Last week, spot gold closed at $1,775.95, up 0.23%.

For most of us, “stress” is considered a bad word (and maybe an ever-present word these days). When we stress about work or relationships, we usually feel miserable.

Gold prices hit $1,800 per ounce last week, a level last seen back in 2011. This occurred as COVID-19 cases in the U.S. increased, causing many states to pull back on reopening.

The major stock market indexes fell last week. The Dow Jones Industrial Average lost 3.3%, the S&P 500 Index fell 2.9%, the NASDAQ Composite dropped 1.9%, and the Russell 2000 small-capitalization index fell 2.8%. The 10-year Treasury bond yield fell almost 5 basis points, as Treasury bonds gained ground for the week. Last week, spot gold rose 1.57%, behaving like a safe-haven asset as stocks took a break from their recent climb.

Several decades ago (far too many) I was a new MBA graduate and had entered the management trainee program at what is now one of the world’s largest fully integrated communications firms.

Gold prices reached a seven-year high last week, passing the previous high set back in mid-April. That high was followed by a trading-range consolidation pattern that lasted until last week.

The major stock market indexes gained last week. The Dow Jones Industrial Average gained 1.0%, the S&P 500 Index rose 1.9%, the NASDAQ Composite climbed 3.7%, and the Russell 2000 small-capitalization index advanced 2.2%. The 10-year Treasury bond yield fell 2 basis points, as Treasury bonds gained ground for the week. Last week, spot gold closed at $1,742.47, up $11.72 per ounce, or 0.7%.

Gold moved up toward the top of its current trading range last week, building support within the current bull market. It closed the week at $1,753 per ounce.

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Exposed

Like a skeleton found in a closet, investors discovered in the first quarter that their portfolios were not being managed in the manner in which they had believed.

Gold moved from the lower end to the middle of its current trading range last week. It closed the week at $1,737 per ounce. If this consolidation continues, it could provide support for more moves up in this bull market.

The major stock market indexes finished up again this week (the S&P 500 has gained more than 3% for three straight weeks). The Dow Jones Industrial Average gained 6.8%, the S&P 500 Index rose 4.9%, the NASDAQ Composite climbed 3.4%, and the Russell 2000 small-capitalization index rocketed 8.1%. The 10-year Treasury bond yield rose 24 basis point, as Treasury bonds tumbled. Last week, spot gold closed at $1,684.38, down $45.89 per ounce, or 2.65%.