Volatility absent in 2017, treasury notes and overdoses
We thought it would be beneficial for the readers to change up the column a bit to address more of the broader issues impacting the financial markets and investors. With the format below, it is possible to provide information and insight on a more timely fashion with the intent of helping you reach more informed decisions regarding your financial future. That said, we welcome your comments at www.faganasset.com.
If you thought this year was one of marked by little volatility you were correct. Prior to 2017, on a daily basis the S& P 500 (the 500 largest publicly traded companies domiciled in the United States) had gains or losses an average of 63 times per year. However, this year that event occurred only eight times. Additionally, investors in the S& P 500 have not experienced a correction of five percent since the end of June, 2016, immediately following the Brexit vote. In fact, that index has not even experienced a drop of 3 percent this calendar year. Finally, the NASDAQ Composite as well as the Dow Jones Industrial Average has closed up eleven of the twelve months in calendar year 2017 marking the first time ever this has occurred for the NASDAQ and the first time since 1958 for the Dow. Of interest is the fact that the Dow Jones Industrial Average followed up 1958 with a gain of more than 16 percent during 1959.
It is like shooting fish in a barrel to say that we believe 2018 will be marked by increased volatility and a correction of at least five percent for all of the major averages.
Everybody expected interest rates to move up this year, as did we. However the yield on the 10year U. S. Treasury Note actually declined from 2.45 percent at the close of 2016 to 2.43 percent as of this past Thursday afternoon. In fact the closing range for the year on the 10-year was a high of 2.62 percent on March 13 and a closing low of 2.06 percent set on September 8.
Rates on the ten-year should trend upward, perhaps touching 3.00 percent during 2018 the positive impact from tax re- form takes hold.
Sadly, according to the Centers for Disease Control’s National Center for Health Statistics 63,000 Americans died from drug overdoses during 2016 as those that involved non-methadone synthetic opioids more than doubled while total overdoses rose by more than twenty percent. This contributed to the reduction in life expectancy from 78.7 years in 2015 to 78.6 years in 2016, the first time life expectancy has declined two consecutive years since the 1963.
Want to juice your stock? Get involved with blockchain technology. According to a press release dated December 21, Long Island Iced Tea Company “is shifting its primary corporate focus toward the exploration of and investment in opportunities that leverage the benefits of blockchain technology.” This information comes a little more than a week after its December 13 press release informing investors that the company had inked an agreement with “Natur, a European hi-tech healthy food and beverage company.” The price of the stock rocketed to an intra- day high of $9.49 per share on December 21st from a prior day close of $2.44. The share price has since settled down to approximately $4.50 per share.
Buyer beware. Did we say buyer beware? Yes, let’s capitalize it. BUYER BEWARE.
Best wishes for a Happy, Healthy, Prosperous 2018 – one filled with good health and many friends. Please note that all data is for general information purposes only and not meant as specific recommendations.
The opinions of the authors are not a recommendation to buy or sell the stock, bond market or any security contained therein. Securities contain risks and fluctuations in principal will occur. Please research any investment thoroughly prior to committing money or consult with your financial advisor. Please note that Fagan Associates, Inc. or related persons buy or sell for itself securities that it also recommends to clients. Consult with your financial advisor prior to making any changes to your portfolio. To contact Fagan Associates, please call 518-279-1044.