Peek of the Week
August 3, 2015
The market is flat.
That’s right. It’s a rare occurrence – something that
has happened just 12 times since 1926, according to Fortune –but the Standard & Poor’s 500 Index (S&P 500) has
remained in a narrow trading range for seven months. For every sector that has delivered performance gains
(for instance, healthcare, software, and consumer discretionary), there has been one with losses that have offset those
gains (for instance, energy, materials, and industrials).
The S&P 500’s unremarkable gains year-to-date are
owed to just a handful of stocks, which Barron’s
said means the market has bad breadth. That’s not a good sign,
but it’s not a bad sign, either. Less breadth doesn’t always signal the end of a bull market:
“Big downturns are almost always preceded by a lack of
breadth, which is one reason some folks are preparing for the end. There’s only one problem: Declining
breadth doesn’t always signal the end of a bull market. From September 4 to October 13 of last year, the
S&P 500 outperformed the equal-weighted version of the index by more than 1.5 percentage points [a measure indicating
lack of breadth], leading to similar calls that it was time to bail. The S&P 500 gained 8.5 percent during
the next three months.”
Fortune’s analyst reviewed the historical data for the dozen
years that offered similar market performance during the first seven months of the year and found that a range of outcomes is possible. The
S&P 500 Index could:
·
Remain relatively
flat: It happened in 1994.
·
Deliver a loss
over the full year: It happened in 1930, 1941, and 1990.
·
Deliver a gain
over the full year: It happened during the remaining eight years.
·
The median return
for the twelve years was 6 percent.
Reading stock market tea leaves is no easy task.
That’s why it’s important to remain focused on your financial goals and the strategies you’ve selected to help
pursue them.
Data as of 7/31/15
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard & Poor's 500
(Domestic Stocks)
|
1.2%
|
2.2%
|
9.0%
|
15.1%
|
13.3%
|
5.5%
|
Dow Jones Global ex-U.S.
|
0.5
|
2.4
|
-6.1
|
6.8
|
3.1
|
2.7
|
10-year Treasury Note (Yield
Only)
|
2.2
|
NA
|
2.6
|
1.5
|
3.0
|
4.3
|
Gold (per ounce)
|
1.6
|
-8.4
|
-14.5
|
-12.2
|
-1.6
|
9.8
|
Bloomberg Commodity Index
|
-1.6
|
-12.0
|
-28.3
|
-14.0
|
-7.5
|
-5.5
|
DJ Equity All REIT Total Return Index
|
1.0
|
-0.9
|
9.1
|
9.9
|
12.4
|
6.8
|
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.
if you sleep more, you may earn more
money. Researchers were trying to
evaluate the importance
of sleep so they focused on two American cities in a single time zone:
Huntsville, Alabama (on the eastern
edge of the central time zone) and Amarillo, Texas (on the western edge of the
same time zone). The sun sets
an hour later in Amarillo, so the assumption was made that people get less
sleep in Amarillo than they do in Huntsville.
The
findings reported in Time Use and
Productivity: The Wage Returns to Sleep, by Matthew Gibson of Williams College
and Jeffrey Shrader of the University of California-San Diego, were people who
get one hour less shuteye, over
a long period of time, earn about 4.5 percent less.
From
an economic perspective, the idea may seem counterintuitive. After all, when
you’re snoozing you’re not producing. However,
from a psychological point of view, it makes a lot more sense. A British study
of 21,000 employees found those who
slept six hours or less each night were less productive than employees who
slept for seven or eight hours.
Of
course, sleep wasn’t the only issue that lowered productivity. According to the
study, physical inactivity, financial worries,
mental health issues, musculoskeletal issues, bullying, impossible deadlines,
and unpaid caregiving all negatively affected workers’ output.
Sleep
issues, however, may become more important as we become attached to devices
like tablets, laptops, and smart
phones. Research described in Scientific
American found two hours of tablet use before bedtime suppressed melatonin
release. Melatonin is a hormone that lets us know it’s time to sleep.
So,
if you’re having trouble getting to sleep and use a smart phone or tablet
before bed, you may want to turn down
the brightness of your glowing screens before bed – or switch back to good
old-fashioned books.
Weekly
Focus – Think About It
“I do not think there is any thrill that can go
through the human heart like that felt by the inventor as
he sees some creation of the brain unfolding to
success… such emotions make a man forget food, sleep, friends, love,
everything.”
--Nikola Tesla, Inventor of the Tesla Coil
Best regards,
Leif M. Hagen
Leif
M. Hagen, CLU, ChFC
LP Financial Advisor
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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.
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Sources:
