Womack Weekly
Commentary
December 4,
2017
The
Markets
What will it take to shake
investors’ confidence?
From the perspective of unsettling events, last
week was jam-packed. North Korea claimed to have the capability to strike the
United States with a nuclear missile, tax reform continued to travel a
controversial path through the House and Senate, and former national security
adviser Michael Flynn pled guilty to lying to the FBI about conversations with
Russia's ambassador.
U.S. stock markets weren’t immune to these events
and some lost value. However, the Dow Jones Industrial Average and the Standard
& Poor’s 500 Index didn’t stay down for long. Both indices finished the
week higher.
Barron’s reported black-box
trading may have been the reason “…the Dow shed 400 points from peak to trough
in a matter of minutes. The drop happened so quickly that some opined that
humans couldn’t have been responsible for the tumble. ‘No way real traders were
moving that fast,’ says Andrew Brenner, head of international fixed income
securities at NatAlliance Securities. ‘Clearly, it was algorithms taking
over.’”
Investor sentiment remained largely undented.
The AAII Sentiment Survey showed slightly
more investors were bullish near week’s end than had been the previous week.
Bearishness was also up, gaining 2.6 percent. Fewer investors were neutral
about markets. Despite an increase in bullish sentiment, the level was below the
historic average for bullishness for the 39th time in 2017. (The AAII survey runs from Thursday to
Thursday, so it did not reflect any changes in sentiment that may have occurred
after reports of Michael Flynn’s indictment and cooperation with special
investigators.)
The CNN/Money
Fear & Greed Index is an investor sentiment gauge that relies on seven
market indicators – stock price momentum, strength, and breadth, put and call
options, junk bond demand, market volatility, and safe haven demand – to
measure whether fear or greed is driving the market. Last week, the needle was
in the Greed range, as it has been for some time.
Data as of
12/1/17
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard & Poor's 500 (Domestic
Stocks)
|
1.5%
|
18.0%
|
20.6%
|
8.8%
|
13.4%
|
6.0%
|
Dow Jones Global ex-U.S.
|
-1.6
|
21.1
|
23.8
|
3.8
|
4.9
|
-0.7
|
10-year Treasury Note (Yield Only)
|
2.4
|
NA
|
2.4
|
2.2
|
1.6
|
3.9
|
Gold (per ounce)
|
-1.2
|
10.0
|
9.8
|
2.2
|
-5.8
|
5.0
|
Bloomberg Commodity Index
|
-0.6
|
-1.2
|
-0.5
|
-9.0
|
-9.6
|
-6.9
|
DJ Equity All REIT Total Return Index
|
-0.5
|
9.2
|
15.8
|
7.5
|
10.7
|
7.3
|
S&P 500, Dow
Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested
dividends (gold does not pay a dividend) and the three-, five-, and 10-year
returns are annualized; the DJ Equity All REIT Total Return Index does include
reinvested dividends and the three-, five-, and 10-year returns are annualized;
and the 10-year Treasury Note is simply the yield at the close of the day on
each of the historical time periods.Sources: Yahoo!
Finance, Barron’s, djindexes.com, London Bullion Market Association.Past performance is
no guarantee of future results. Indices are unmanaged and cannot be invested
into directly. N/A means not applicable.
retirement requirements. For a number of years,
policymakers have been focused on finding ways to help Americans become better financially
prepared for retirement. Studies have found having access to payroll-deduction
retirement savings plans at work makes it 15 times more likely Americans will
save for the future. Consequently, policymakers have focused their attention on
smaller companies. About 36 percent of Americans work for companies with fewer
than 100 employees, and many of these businesses do not offer retirement plans.
Last July, Oregon launched OregonSaves, the state’s auto-IRA
program. Companies that don’t have workplace retirement plans are required to
facilitate the program by:
·
Providing information to set up Roth IRA accounts for
employees
·
Making payroll deductions to the Roth accounts
·
Delivering updated employee information
California,
Connecticut, Illinois, Maryland, and Massachusetts are working on similar
programs.
Some business owners have embraced the
auto-IRA opportunity, while others object to having the government involved. A Pew Charitable Trusts survey of 1,600
small and mid-sized business owners found 51 percent would prefer to sponsor their
own retirement plans rather than participate in a state-run plan.
Many employers who participated in focus
groups were not aware low-cost retirement plan options are available in the
marketplace. Pew researchers noted:
“Most [small and medium-sized employers] did
not have a full understanding of how 401(k) plans work, and few were familiar
with plans or incentives designed for small businesses, such as the Simplified
Employee Pension (SEP) Plan, the Savings Incentive Match Plan for Employees
(SIMPLE), or the small employer tax credit for retirement plan startup costs.”
If you’re interested in learning more about
retirement plan options for small businesses, sole proprietorships, or
freelancers, contact us today!
Weekly
Focus – Think About It
“Humanity is a
lot like me. It’s an aging movie star, grappling with all the newness around
it, wondering whether it got it right in the first place and still trying to
find a way to keep on shining regardless.”
--Shah Rukh Khan, Indian
film actor
Best regards,
Womack
Investment Advisers, Inc.
WOMACK INVESTMENT ADVISERS, INC.
Oklahoma / Main Office: 1366 E. 15th Street - Edmond, OK 73013
California Office: 4660 La Jolla Village Dr., Ste. 500 - San Diego, CA 92122
Phone (405) 340-1717 - Toll Free (877) 340-1717
Oklahoma / Main Office: 1366 E. 15th Street - Edmond, OK 73013
California Office: 4660 La Jolla Village Dr., Ste. 500 - San Diego, CA 92122
Phone (405) 340-1717 - Toll Free (877) 340-1717
Website: www.womackadvisers.com
Are you prepared for
the eventual market volatility?
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*
These views are those of Carson Group Coaching, and not the presenting Representative
or the Representative’s Broker/Dealer, and should not be construed as
investment advice.
*
This newsletter was prepared by Carson Group Coaching. Carson Group Coaching is
not affiliated with the named broker/dealer.
*
Government bonds and Treasury Bills are guaranteed by the U.S. government as to
the timely payment of principal and interest and, if held to maturity, offer a
fixed rate of return and fixed principal value.
However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate
bonds are considered higher risk than government bonds but normally offer a
higher yield and are subject to market, interest rate and credit risk as well
as additional risks based on the quality of issuer coupon rate, price, yield,
maturity, and redemption features.
*
The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities
considered to be representative of the stock market in general. You cannot
invest directly in this index.
*
All indexes referenced are unmanaged. Unmanaged index returns do not reflect
fees, expenses, or sales charges. Index performance is not indicative of the
performance of any investment.
*
The Dow Jones Global ex-U.S. Index covers approximately 95% of the market
capitalization of the 45 developed and emerging countries included in the
Index.
*
The 10-year Treasury Note represents debt owed by the United States Treasury to
the public. Since the U.S. Government is seen as a risk-free borrower,
investors use the 10-year Treasury Note as a benchmark for the long-term bond
market.
*
Gold represents the afternoon gold price as reported by the London Bullion
Market Association. The gold price is set twice daily by the London Gold Fixing
Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy
ounce.
* The
Bloomberg Commodity Index is designed to be a highly liquid and diversified
benchmark for the commodity futures market. The Index is composed of futures
contracts on 19 physical commodities and was launched on July 14, 1998.
*
The DJ Equity All REIT Total Return Index measures the total return performance
of the equity subcategory of the Real Estate Investment Trust (REIT) industry
as calculated by Dow Jones.
*
Yahoo! Finance is the source for any reference to the performance of an index
between two specific periods.
*
Opinions expressed are subject to change without notice and are not intended as
investment advice or to predict future performance.
*
Economic forecasts set forth may not develop as predicted and there can be no
guarantee that strategies promoted will be successful.
*
Past performance does not guarantee future results. Investing involves risk,
including loss of principal.
*
You cannot invest directly in an index.
*
Stock investing involves risk including loss of principal.
*
Consult your financial professional before making any investment decision.
*
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Sources:
https://www.barrons.com/articles/washington-whipsaws-the-market-1512186612 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/12-04-17_Barrons-Washington_Whipsaws_the_Market-Footnote_4.pdf)
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