For four days in a row, the markets closed down. That is in itself unusual. It has only happened four other times since the March 2020 low. Does this portend further downside in September 2021? On Friday, the markets bounced back. The damage to the averages has been minimal thus far. But given how far we have come, more and more brokerage houses (Goldman Sachs, Deutsche Bank, and Morgan Stanley, among others) are warning that the September-through-October 2021 time frame could see a 10% correction. How much weight should you give these gloomy predictions? If you are a short-term day,…
Insights & Advice
Tag: tapering
Investors are chasing stocks higher
The proverbial Wall of Worry provided plenty of foot holds for investors this week. The major averages continued to make new highs (or hovered just below them) despite bad news and focused instead on anything that could justified higher prices. The belief that the Delta variant of the coronavirus may be peaking in the worst-hit states was enough to cheer investors. Not that the extremely contagious infection ever had much of an impact on the markets anyway. Still, the hope that Delta has peaked gave added umph to large cap growth stocks. Helping this summer’s move higher was almost $30…
You’re not as rich as you think you are
“If you have a tax preparer, you do not have a tax planner.” —James Pollard’s CPA “Tax preparation is focused on getting this year’s tax return prepared and to the IRS … it’s all about what happened this last year. Let’s get it done and move on … the contrast to that in tax planning is taking a forward-looking approach to saying, ‘what can we proactively do to make sure that we’re minimizing how much we have to pay to the IRS?’” —Steven Jarvis, CPA I recently listened to James Pollard’s “Advisor Coach” podcast with guest Steven Jarvis, CPA. Non-industry folks won’t recognize those…
A week of surprises keeps investors hopping
There were plenty of reasons why the stock market was a bit jumpy this week. Let’s go through them. Two weeks ago, I wrote that I was worried “that we could suddenly see a spike in new Delta variant cases that impacts economic growth. Remember that less than half of all Americans are fully vaccinated. President Biden, his Chief Medical Advisor, Anthony Fauci, and the Fed are all sounding warnings over this risk, yet the markets are ignoring it.” Investors finally caught on this week and began to realize the risk presented by the Delta variant and its impact on…
A churn at the top
It was a sleepy week in the markets for the major averages. Stocks flirted with the old highs, only to fall back by the end of the week. Energy and a few meme stocks occupied most of the attention. Crude oil spiked higher, nearing almost $70 a barrel (bbl), pulling energy stocks along with it. Energy traders were heartened by the latest OPEC meeting. The cartel expects demand to outstrip supply by more than a million barrels a day for the foreseeable future. As a result, the members intend to gradually increase production as the global economy gathers steam. Most…
Fed puts markets on notice while crypto crashes
It had to happen at some point with economic growth spiking as high as it has, and inflation beginning to creep up. Investors should have expected the Fed to think about a change in policy. This week, we had our first mention of the dreaded “T” word. T is for taper and in the minutes of the Fed’s April FOMC meeting released on Wednesday, the entire financial community jumped on just one phrase: “it might be appropriate at some point” to consider tapering asset purchases if the economy shows “rapid progress.” In other words, the Fed is signaling that they…