Special Memo: October 10th Declines

Sam Ngooi Comments

As is our practice when US stock prices experience significant declines, we write to comment on what we think is happening. The declines of October 10th were as follows: S&P 500, down 95 or 3.3%; Dow Jones, down 832 or 3.1%; NASDAQ, down 316 or 4.1%. We suggest putting the declines in the context of recent gains, in this case …

September 2018 Comments: Observations on Developed International & Emerging Markets

Sam Ngooi Comments

While US stock prices have continued to rise, international and emerging stock markets have had a difficult year.  These markets are used by investors to provide global diversification for their portfolios. The results for the last few years, and 2018 year to date are as follows:   2015 2016 & 2017 YTD 2018 Developed International (4.3%) +29.4% (1.6%) Emerging Markets …

August 2018 Comments: Current Financial Markets

Sam Ngooi Comments

US stock prices have continued to rise, reaching historic new highs last attained in late January 2018, while bond prices have stabilized, resulting in positive returns. These currently favorable financial market results have occurred in the context of the following presumed negatives: New tariffs (see July Comments) on China and other parts of the world; Expectations that the Federal Reserve …

July 2018 Comments: Tariffs

Sam Ngooi Comments

In a recent front page article on tariffs (6/20/18), the NY Times wrote in its lead paragraph,  “President Trump’s threat to impose tariffs on almost every Chinese product that comes into the US intensified the possibility of a damaging trade war, sending stock prices tumbling yesterday and drawing a rebuke from retailers, tech companies and manufacturers.”  For the record, the …

June 2018 Comments: Stock Indexes

Sam Ngooi Comments

During the month of June, it was announced that General Electric’s stock would be dropped from the Dow Jones Industrial Average (DJIA) of 30 large company stocks. For those of us who remember GE as the largest company by market value in the stock market, this was shocking news.  The stock that people had been told never to sell had …

May 2018 Comments: Political Conflict and its Impact on Financial Market Prices

Sam Ngooi Comments

In our July 2017 Comments, we wrote that….”following Donald Trump’s surprising presidential election victory, the major US stock market indices have registered their own surprising gains, with the S&P 500 increasing from 2,140 on election eve 2016 to 2,470 as of the end of July 2017, a gain of 15.4 %. Without taking any position on the current political situation …

April 2018 Comments: Inflation & Financial Market Prices

Sam Ngooi Comments

Inflation refers to the declining purchasing power of money over time, caused by a general level of rising prices.  In an economy with a 2% annual inflation rate (the favored figure for the US Federal Reserve; see NY Times article cited below), items that cost $10,000 today would have cost $5,000 36 years ago, using that 2% rate. This also …

March 2018 Comments: The Volatility of Stock Prices

Sam Ngooi Comments

There have been many days during the first quarter when stocks have fluctuated, either up or down, more than one percent. Some days, those fluctuations have exceeded two percent. The investment community and media refers to these kinds of large fluctuations as volatility. We can use the major US stock indexes as illustrations: With the Dow Industrials at approximately 24,000, …

Feb 2018 Comments: The Difficulty of Attributing Causation to Stock Price Movements

Sam Ngooi Comments

This month’s Comments provide current examples of an important point we have made regularly in the past: no one really knows the causes for stock prices and their sometimes dramatic changes. Current case in point: from Friday, February 2nd through Thursday, February 8th, covering only five business days, US stock prices (S&P 500), declined by approximately 9% (2,832 to 2,581, …

Special Memo: Longer Term History of Stock Price Declines

Sam Ngooi Comments

As stock prices continue their recent sharp fluctuations, mostly to the downside, we are writing again with more information (research from Guggenheim Investments), to present a long term perspective. From year-end 1945 to year-end 2017, covering 72 years and using the S&P 500 index (note: S&P 500 index and Dow Industrial average often have similar percentage price changes), there have …