Weekly Access

Market Update

02/09/18

We are in the midst of the 28th time the stock market fell between 10% to 20% since 1945. 




Tax Cuts: What’s Baked into Expectations?

By Michael McKeown, CFA, CPA – Chief Investment Officer

A tax cut puts more money in shareholders’ pockets and that is a good thing for company stock prices.  We learn in Finance 101 that good news alone does not make markets go up.  What matters is whether that news is baked into market expectations.  A few months ago, markets were not sure if tax reform would get passed.  The increasing likelihood of Congress working together and continued positive economic data pushed equity markets higher the last several months.

Looking ahead in the U.S., analysts forecast the highest earnings growth for mid-sized companies.  Small caps have the lowest earnings growth expectations, which is surprising considering the domestic economic strength.

Even more interesting, analysts see earnings in the U.S. growing slower than most major markets.  This even included the United Kingdom, wading through “Brexit”.  Japan and emerging markets are on top, with earnings projections of 20% and 18%, respectively.

This comes at a time when U.S. equity markets are priced at the highest valuation levels in the last twenty years, outside of the technology bubble in the late 1990s.  Japan’s price to earnings (shown on the right scale because it hit an obscene 80x in 2000!), is near the lows despite its rapid earnings growth.

While confidence is rightfully high in the U.S., abroad we see greater opportunities.  Investors now have the most money in stocks since 1999/2000.  Tilting equity portfolios overseas makes sense today with lower valuations and a greater reward to risk ratio.

 

This material is based on public information as of the specified date, and may be stale thereafter. Aurum Wealth Management Group has no obligation to provide updated information on the securities or information mentioned herein. Actual events may differ from those assumed and changes to any assumptions may have a material impact on any projections or estimates.




Picking a Stock: Not for the Faint of Heart

11/20/17

By Michael McKeown, CFA, CPA – Chief Investment Officer

Jesse Livermore, considered by some the most famous trader ever, learned to trade in the bucket shops in the early 1900s.  He profited from the 1929 market crash by betting it would fall, and certainly earned his nickname, “Boy Plunger.”




Ready For The Pitch

09/22/17

After 22 wins in a row for the hometown Cleveland Indians, who doesn’t have baseball fever?   The Tribe breaking the American League record that stood for 15 years- and then the all-time record- was off the charts for even the stat-heads.




Watching The Weight

08/25/17

In designing portfolios, we talk about the term ‘weight’ (as a percentage of the total portfolio) to asset classes, strategies, and styles.  We throw around the word like everyone knows the meaning as we intend.   




Puppy Investments

08/10/17

A little over a month ago, my wife and I got a puppy.

Meet Oakley.




The Story Behind Americans Owning Stocks

07/06/17

The old adage for why the stock market is up on a given day simply says, “there were more buyers than sellers.”




Happy Birthday, ‘Merica.

06/27/17

Over the next week the U. S. of A. celebrates two important milestones. 




Where Did All The Stocks Go?

06/05/17

Just twenty years ago, there were 7,322 listed public companies in the United States.  By the end of 2016, that number was cut in half.   Only 3,671 companies are publicly traded on U.S. exchanges.




Spring Housing Selling Season

05/18/17

Housing is an important component of the U.S. economy.  Monitoring this sector’s strength and growth trend has forecasting value.  Like any industry, housing has its own cyclical pattern, which was on display over the last decade.




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