Peek of the Week
July 25, 2016
Leif Hagen and Donna Roberts
The Markets
Like
a cool breeze on a hot day, the post-Brexit market rally has soothed investors.
The
CBOE Volatility Index (VIX), also known as the fear gauge, fell significantly
during the past few weeks, according to CNBC.com.
The VIX measures investors’ concerns about future volatility. The lower the
Index is; the calmer investors are about the future. In late June, the VIX rose
as high as 25.76. Last week, it hovered around 12.
Barron’s reported the latest advisory
sentiment readings from Investors
Intelligence showed bullishness at 54.4 percent, up two percentage points
from last week. That’s the highest reading since April 2015 (just before the
S&P 500 hit its previous record).
The
relative serenity of investors has been good for markets. By the middle of last
week, the Dow Jones Industrial Average (Dow) and the Standard & Poor’s 500
Index (S&P 500) were at record highs. Not everyone is convinced investor
positivity is a good sign, however. Barron’s
explained:
“After
nearly two years of sideways trading, albeit with some large swings, the
indexes finally gave what should be an important buy signal. But is it really?
...I am not talking about the simple divergence between price and volume during
the June-July rally, although that certainly does not help the bulls. Nor am I
considering the seasonal cycle, which teaches us to ‘Sell in May’ and sit out
the usually weaker summer months. And I am not talking about any news from
politics to Brexit to terrorism…What really bothers me is the lack of dissent
in the bullish chorus.”
Contrarians,
investors who use popular opinion as a gauge of what not to do, may find
themselves leaning toward pessimism.
Data as of 7/22/16
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard & Poor's 500 (Domestic
Stocks)
|
0.6%
|
6.4%
|
2.9%
|
8.7%
|
10.1%
|
5.6%
|
Dow Jones Global ex-U.S.
|
0.0
|
0.4
|
-8.9
|
-1.4
|
-1.6
|
0.2
|
10-year Treasury Note (Yield Only)
|
1.6
|
NA
|
2.3
|
2.5
|
3.0
|
5.0
|
Gold (per ounce)
|
-0.5
|
24.3
|
21.3
|
-0.2
|
-3.8
|
8.1
|
Bloomberg
Commodity Index
|
-2.4
|
7.7
|
-11.2
|
-13.3
|
-12.5
|
-6.9
|
DJ
Equity All REIT Total Return Index
|
1.7
|
17.9
|
22.7
|
12.7
|
12.2
|
7.6
|
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.
Fake
charities are on the list. Groups
masquerading as charitable organizations to solicit donations from
generous-minded individuals are among the twelve cons named in the Internal
Revenue Service’s (IRS) ‘Dirty Dozen,’ a list of common scams targeting
taxpayers.
Americans tend to be a generous
bunch. During 2015, they gave more than $373 billion to charities, setting a
record for the second year in a row, according to GivingUSA.org. People gave to all sorts of organizations including:
- Religion
($119.30 billion)
- Education
($57.48 billion)
- Human
Services ($45.21 billion)
- Foundations
($42.26 billion)
- Health
($29.81 billion)
- Public-Society
Benefit ($26.95 billion)
- Arts/Culture/Humanities
($17.07 billion)
- International
Affairs ($15.75 billion)
- Environment/Animals
($10.68 billion)
Millions more may have gone to
groups pretending to be charities. The
IRS offered some recommendations for avoiding scams. Before you give, get the exact
name of the charity. Many fake charities use names that sound similar to those
of legitimate charities.
Also, request the charity’s employer
identification number and use the IRS’s Exempt Organizations Select Check
search tool to review the organization’s tax status and filings. (While you’re
at it, you may want to review how much the charity spends on fundraising versus
programs to confirm it is spending donations judiciously.)
Once you’ve done your homework,
don’t give cash. Making your donation by check or credit card provides a record
for tax purposes and is more secure.
Finally, no matter how kind a
charity’s representative seems on the phone or in person, do not give him or
her personal financial information or other important identification data, like
your Social Security number.
Weekly Focus – Think About It
“You
are never too old to set another goal or to dream a new dream.”
-- C. S. Lewis,
British novelist
Warm regards from Eagan,
Leif M. Hagen
Leif M. Hagen, CLU, ChFC
LP Financial Advisor
Securities offered through LPL Financial Inc., Member FINRA/SIPC.
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* This newsletter was
prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with
the named broker/dealer.
* 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.
* The Standard & Poor’s
500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect
fees,
expenses, or sales charges.
Index performance is not indicative of the performance of any investment.
* 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.
* Consult your financial
professional before making any investment decision.
* Stock investing involves
risk including loss of principal.
* To unsubscribe from the
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Sources:
[1] http://www.cnbc.com/2016/07/19/no-fear-heres-why-the-vix-has-cratered.html or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/07-25-16_No+fear_+Here%E2%80%99s+why+the+VIX+has+cratered.pdf
[2] http://www.cboe.com/micro/vix/historical.aspx (For June
index readings choose Historical Daily Prices – Spreadsheet with Closing Prices
for Several Indexes) or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/07-25-16_VIX_Historical_Price_Data_CBOE.pdf
[5] https://www.irs.gov/uac/Newsroom/Fake-Charities-Are-a-Problem-and-on-the-IRS-Dirty-Dozen-List-of-Tax-Scams-for-2016-1 or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/07-25-16_Fake_Charities_Are_a_Problem_and_on_the_IRS_%E2%80%9CDirty_Dozen%E2%80%9D_List_of_Tax_Scams_for_2016.pdf
[6] http://givingusa.org/giving-usa-2016/ or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/07-25-16_Giving_USA_2015_Was_America%E2%80%99s_Most_Generous_Year_Ever_Giving_USA.pdf
[7] http://www.consumerreports.org/charitable-donations/best-and-worst-charities-for-your-donations/ or go https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/07-25-16_Best_and_Worst_Charities_for_Your_Donations_Consumer_Reports.pdf
[8] http://www.brainyquote.com/quotes/quotes/c/cslewis119176.html?src=t_motivational or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/07-25-16_You_are_never_too_old_to_set_another_goal_or_to_dream_a_new_dream_CS_+Lewis.pdf
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