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Wall Street Steward Blog

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A More Durable Rally

The stock market, as measured by the S&P 500 Index, has returned to the high-end of the trading range of the past two months, as you can see in Chart 1. This is the fourth time the Index has rebounded to around the 1220 level. Each of the prior three rebounds were reversed as the market was pulled lower again by fears of financial crisis and recession. Rather than retreat back to the low end of the trading range over the next week or two, there are several reasons why this rally may be more durable than those that preceded it in recent months and may sustain much of the of the gains, as the S&P 500 Index takes a volatile path back toward a modest, single-digit gain for the year.

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Will Santa Claus Bring Higher Stock Prices?

There are two types of people in the financial business:  those who don’t know and those who don’t know that they don’t know.  After 17 years in this industry, this statement makes even more sense to me today than it did initially. In my opinion, it is useless to forecast what the economy/stock market might do because nobody has shown the ability to accurately do so.

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What To Do With That Rock

As a kid, there was nothing that I liked more than going to my grandparents’ farm in West Virginia. The animals and acres of open land offered many opportunities for a youngster to have some serious fun and, from time to time, find a bit of trouble to get into. However, I never understood springtime on the farm. Every other house along the four-hour drive from my home to the farm looked so green and adorned with flowers, while my grandparents’ farm in the spring consisted of acres of dirt as far as the eye could see. It certainly didn’t look like spring.

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Reader Questions - June-August

Here is the recent edition of reader questions.  THANKS to all who sent questions.  For the rest of you….please send me your questions and I will do my best to answer the ones I am legally allowed to answer in writing.Not all questions can be answered.  If the question involves a specific investment or your personal financial situation, a phone call is a better medium for us to use.

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Eurobonds: A Potential Positive Not Lost in Translation

Last week,  Federal  Reserve chairman, Ben Bernanke delivered his speech from the Fed’s Jackson Hole conference, the event that helped to turn around last summer’s fear of recession. While people along the eastern seaboard lined up at stores on Friday, August 26, to buy batteries and bottled water in anticipation of the unknown ravages of hurricane Irene, gentle Ben provided no surprises to disturb the markets. Instead he provided a review of the Fed’s economic outlook and policy options already well known to market participants. The attention on the Fed was misplaced. While market participants have been demanding a response by policy makers, they are looking for that response in Europe more  than in the United States.

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The Advisor Protection Program

The S&P 500 dropped from 1,287 on August 1 to 1,119 on August 8.  In just 5 trading days, investors suffered a loss of over 13%.  Since 1990, this is only the fourth time the overall market has lost more than 12% in just a few days.  Three of those times occurred in 2008*.