dougtalksmoney
Doug Gibson
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Doug Talks Money | Real Estate Tax Specialist | Financial Strategist
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As we close out the month and barring any catastrophic losses tomorrow, the market will close out the month of November with its best month of the year logging gains of over 8%. This surge could not have come at a better time following declines in the previous 3 months, with average losses of 3% per month. The silver lining, since we can always find a bright spot in there somewhere, is that historically, in years when the market declines in August, September, and October, which it did this year, returns through the end of the year have been exceptionally strong. As you can see from the chart, the trend will continue this year with Novembers strong returns. With all eyes now turning to December, will investors get a Santa Claus Rally, or will they be left with coal in their stockings? Will December be on the Naughty list or the nice list? Will we catch December under the mistletoe? Ok, that's enough, you get the idea, we will just wait and see. #DougGibson #gainin60seconds #financialadvisor #financialplanner #financialadvice #investments #wealthplanner #wealthadvisor #assetstrategy #assetplanning
As the market continues to advance following a strong day yesterday, the main question on everyone's mind seems to be can this trend continue? To me, the prevailing sentiment being applied to the market is similar to the "Hot Hand" fallacy in basketball. The hot hand fallacy implies that the odds a shooter will make a basket is always 50/50 regardless of whether they made or missed the previous shot. When it comes to the market, investors often believe that if the market advances for extended periods, this increases the probability that there will be a decline. After all, what goes up must come down right? Today's chart illustrates the returns following multiple days of positive market returns. There have been 233 winning streaks of at least 6 days for the S&P 500 since 1950. The green line measures the average performance following a string of 9 consecutive up days, the red line 8 days, and the black line charts the markets average returns following a string of 7 positive days. As you can see, on each occasion the market continues to advance. During the latest climb off the October lows, the S&P 500 rose 8 consecutive sessions gaining 6.4% during that period. So, in contrast to the hot hand fallacy in basketball, when it comes to the market what goes up often stays up, at least in the short run. #DougGibson #gainin60seconds #financialadvisor #financialplanner #financialadvice #investments #wealthplanner #wealthadvisor #assetstrategy #assetplanning
With many investors already feeling uneasy from the volatility in the stock market the past few months, the prospect of a potential Government Shutdown has begun to stoke those fears. While there has been some talk of a potential deal, the polarization of the current political environment always casts a high degree of doubt that potential last-minute disagreements pose for getting a deal signed before the November 17th deadline when the government funding runs out. The first chart shows the last 3 shutdowns have lasted anywhere from 2 weeks to just over a month. What is surprising is that the impact these have had on overall economic growth as measured by GDP has been minimal at best, averaging less than .3%. Furthermore, when examining the impact the last 4 shutdowns have had on the stock market, the data is even more positive. The S&P 500 has advanced during each of the previous occasions logging gains as high as 17% during the 26 days the government was shut down in 1995. Average returns for the S&P during the previous 4 shutdowns have been an astounding 11%. The key takeaway is the critical importance of separating political impacts from financial impacts when making investment decisions. #DougGibson #gainin60seconds #financialadvisor #financialplanner #financialadvice #investments #wealthplanner #wealthadvisor #assetstrategy #assetplanning
This week the Fed made their widely anticipated announcement regarding interest rates. Going into the announcement, the prevailing sentiment was that the Fed would elect not to raise rates given current economic activity, but the actual odds were closer to a coin flip. Fortunately, expectations were correct, and the Fed elected to hold rates steady prompting a log awaited rally for the market. With the market on track for it's best week since last October, combined with a renewed sense of optimism that the cycle of rate increases are behind us, investors can begin looking for ways to start putting cash to work. This chart highlights the returns of specific assets classes following the last rate increase. As you can see every asset class is higher with equities topping the list with average returns 12 months after the last increase of over 17%, followed by a 60/40 stock and bond portfolio at just under 14%, US Bonds at 11.5%, and international stocks at 10%. Despite the halt in rate increases even short-term bonds and cash continue to log solid gains. As we sit here today, the last rate increase was on July 28, which is just over 3 months ago. The market finished the week up 5%, which as you can see aligns perfectly with historical returns, so the big question now becomes is the Fed done raising rates? #DougGibson #gainin60seconds #financialadvisor #financialplanner #financialadvice #investments #wealthplanner #wealthadvisor #assetstrategy #assetplanning
I came across an interesting chart that shows the relationship between the yield on the 10-year treasury and the forward PE ratio of the S&P 500. The dark blue line represents the inverted yield on the 10-year treasury and the light blue line corresponds to the 12-month forward PE ratio of the S&P. The relationship appears to support a fairly rational thesis, when interest rates decline, . . . . . the value of future cash flows rises and pushes equity valuations higher. At least that was the case until this year, where, as you can see from the chart, the relative correlation begins to diverge. As rates have continued to rise, or decline due to the inverted chart, the historical correlation would suggest that the S&P should have declined as well, which until recently has not been the case. With the Fed now hinting additional rate increases are off the table, it will be interesting to see if the yield on the 10 year begins to climb back in line with the S&P or if S&P earnings will fall, bringing it closer to the yield of the 10-year treasury. #DougGibson #gainin60seconds #financialadvisor #financialplanner #financialadvice #investments #wealthplanner #wealthadvisor #assetstrategy #assetplanning
Late last week I posted about the steepening decline in existing home sales. At the time the number of existing homes sold in the US had declined to just over 4 million homes but was still above the lows following the 2020 pandemic and the great financial crisis in 2010 prior to that. Well last week's report showed further declines pushing the number of existing homes sold to 3.9 million units. . . . . . As you can see the numbers have been in freefall since February declining by over 2 million units since the beginning of the year. The driving force behind the decline has of course been the rise in mortgage rates, pictured above in blue, which just hit 8%. The last time mortgage rates were 8% we were still recovering from hangovers following our millennium parties and Tom Brady was a rookie in the NFL. #DougGibson #gainin60seconds #financialadvisor #financialplanner #financialadvice #investments #wealthplanner #wealthadvisor #assetstrategy #assetplanning
Following months of supply chain deficiencies, highlighted by higher oil prices, medication delays, and empty grocery store shelves, the US has made bringing manufacturing back home a priority. While America remains a largely service oriented economy due in large part to tech and software, there has been a sizeable shift in domestic manufacturing efforts following the pandemic. While America invented the semiconductor, today it produces a meager 10% of global supply. Since 2020, growth rates for US manufacturing has spiked 80% with domestic manufacturing now representing almost 200 billion dollars annually more than tripling since 2007. More work needs to be done to begin balancing the scale from consumption to manufacturing, but it is good to see some progress being made. #DougGibson #dougtalksmoney #gainin60seconds #financialadvisor #financialplanner #financialadvice #investments #wealthplanner #wealthadvisor #assetstrategy #assetplanning
. I am sure you are as tired of hearing about inflation as I am of talking about it but in preparation for the announcement on interest rates by the fed coming out tomorrow, I figured this chart was particularly relevant especially for my partners in real estate. This chart shows the components of the consumer price index, which is the most common measure of inflation, along with each components weighing in the overall figure. As you can see from the chart, the single largest component is housing. Despite the increases in interest rates, housing costs have continued to rise 5.4% year over year. And considering housing accounts for just over 40% of the overall CPI number, it is pretty clear why the Fed has continued to raise rates so fast if they expect to be able to bring the CPI numbers down to their 2% target range. The big question now, is are they done raising rates? #DougGibson #gainin60seconds #financialadvisor #financialplanner #financialadvice #investments #wealthplanner #wealthadvisor #assetstrategy #assetplanning
ChatGPT has taken the world by STORM. One of the most common benchmarks to measure user adoption is how long it has taken a company to reach 1 million users. Check out todays episode to learn how long it has taken ChatGPT to reach that milestone and how that compares to other companies who have previously eclipsed that mark. #DougGibson #gainin60seconds #samaltman #chatgpt #financialadvisor #financialplanner #financialadvice #investments #wealthplanner #wealthadvisor #assetstrategy #assetplanning
Check out this episode of the Execu-Tips for Success FastCast with Core Group Resources CE Matt Furhman. Matt shares some amazing insight in to his journey and how his life was impacted by a simple knock at his front door all the way through learning to balance contentment and ambition. Matt even throws in a little Astrology to illustrate how important attitude is to success and having a faith based approach has helped shape his mentality in the many facets of the decision making process. Be sure to follow Matt and his amazing team at Core Group Resources as they continue to deliver exceptional results by finding the perfect fit for an organization's success. #executips #executiptuesday #executipsforsuccess #executipstuesday #mattfuhrman #coregroupresources
As a few select stocks continue to drive the market, it is critical to evaluate whether the trends can continue or if they have risen faster than their economics can support. Financial metrics such as the P/E Ratio are useful tools to help determine if a company has become overvalued. #DougGibson #gainin60seconds #financialadvisor #financialplanner #financialadvice #investments #wealthplanner #wealthadvisor #assetstrategy #assetplanning
