For the past three months, the Standard & Poor’s 500 has churned sideways. Is that a bad portent? Not at all. The outlook is for higher prices, if you look at three indicators: the relationship between inflation and market value (known as the Rule of 20), the S&P 500’s earnings/price yield and energetic merger activity.
We’re deep into the year’s first quarter, and it’s time for some predictions to guide investing. Such as: U.S. growth more muted, others weak, stocks up, inflation still low, interest rates up, tech on fire.
Of course, forecasts have a disturbing tendency to look foolish in retrospect, so we go about this exercise with all due humility.
Market turbulence, as the January downturn shows, tempts impatient investors to do foolish things. Trouble is, too many of us are hard-wired to opt for instant gratification and forsake long-term strategies – as the famous marshmallow experiment shows.
The market is off to a shaky start this year, and wobbly overseas economies get much of the blame. Will the downturn continue, and the six-year-old bull market expire? Yes. Too-high valuations and falling investor risk appetite signal that.
Since the financial crisis, corporate America has posted surging earnings and lagging revenue growth. That is not a good thing for the long term. But given the pickup in the U.S. economy, we may be on the brink of a revenue resurgence – finally.
A record-breaking Dow Jones Industrial Average always makes all the headlines and gets everyone excited, but what does it means for you? Nothing but a reminder to focus on your investment portfolio.
A conventional piece of investing advice is to put most of your money into broad market index funds, like the one tracking the Standard & Poor’s 500. But few people invest solely in the S&P 500 or solely in U.S. stocks.
The stock market has had bumpy start this year. Surprised? It mirrors January 2014. Lack of central bank stimulus, oil’s price decline and a few tepid reports are to blame this time.
How do you find out if your investments help a company or cause you detest – and what can do about it?
Overconfidence in our ability to predict the markets presents major hurdles to many investors. Why is it so tough to be disciplined and humble?