Holiday Hours: Please note our holiday closures on December 24-26th and also December 31st. Please contact us for any end of year trades by December 21st. This is the last 2018 edition of Your Money Our Thoughts. We will resume in January 2019. Happy New Year!
Quote of the Week
“It’s time to fix our toxic notion of what makes a good leader. The best kinds of leaders focus on the collective, not the individual.” – Nora Bateson
The long term sell signal on the S&P 500 came in today from our software. We had already exited the markets in late October, but the long term sell signal confirms what we were already seeing. So far this is the worst December since 1931. So much for a Santa Claus rally.
We have already adjusted all portfolios to reduce the risk level by investing in long term U.S. Treasury bonds, and for those of you who returned the inverse letter, we will be taking a small position in two funds that short individual stocks. For those of you who have expressed to us to be ultra conservative, your portfolios will consist of high-grade bonds only.
Stocks finished lower last week with all the major indices in correction territory for the first time since February of 2016. Trade headlines remain front and center. While there were some positive signs of de-escalation in the trade rhetoric, this was offset by continued global growth concerns. In Germany, the strongest economy in Europe, economic growth recently went negative. Southern Europe is a disaster, and the Emerging Markets have been in decline all year.
We just met with someone who lives in China and is married to a Chinese citizen. He made an interesting point. First, he told me that the Chinese people are extremely proud people and they hate losing face by being pushed around. Second, he told me that the Chinese are very patient people. They plan for the long term, and if necessary, they are willing to suffer pain now to achieve long term success. They think in tens of years rather tens of months. We shall see what happens.
Last week the Dow was down 1.2%, The S&P 500 was down 1.3%, the Nasdaq was down 0.8%, and the MSCI EAFE was down 0.1%, For the year the Dow is down 2.5%, the S&P 500 is down 2.8%, the Nasdaq is up 0.1%, and the MSCI EAFE is down 14.5%,
A Visit from St. Nicholas BY Clement Clarke Moore
‘Twas the night before Christmas, when all through the house
Not a creature was stirring, not even a mouse;
The stockings were hung by the chimney with care,
In hopes that St. Nicholas soon would be there;
The children were nestled all snug in their beds;
While visions of sugar-plums danced in their heads;
And mamma in her ‘kerchief, and I in my cap,
Had just settled our brains for a long winter’s nap,
When out on the lawn there arose such a clatter,
I sprang from my bed to see what was the matter.
Away to the window I flew like a flash,
Tore open the shutters and threw up the sash.
The moon on the breast of the new-fallen snow,
Gave a lustre of midday to objects below,
When what to my wondering eyes did appear,
But a miniature sleigh and eight tiny rein-deer,
With a little old driver so lively and quick,
I knew in a moment he must be St. Nick.
More rapid than eagles his coursers they came,
And he whistled, and shouted, and called them by name:
“Now, Dasher! now, Dancer! now Prancer and Vixen!
On, Comet! on, Cupid! on, Donner and Blitzen!
To the top of the porch! to the top of the wall!
Now dash away! dash away! dash away all!”
As leaves that before the wild hurricane fly,
When they meet with an obstacle, mount to the sky;
So up to the housetop the coursers they flew
With the sleigh full of toys, and St. Nicholas too—
And then, in a twinkling, I heard on the roof
The prancing and pawing of each little hoof.
As I drew in my head, and was turning around,
Down the chimney St. Nicholas came with a bound.
He was dressed all in fur, from his head to his foot,
And his clothes were all tarnished with ashes and soot;
A bundle of toys he had flung on his back,
And he looked like a peddler just opening his pack.
His eyes—how they twinkled! his dimples, how merry!
His cheeks were like roses, his nose like a cherry!
His droll little mouth was drawn up like a bow,
And the beard on his chin was as white as the snow;
The stump of a pipe he held tight in his teeth,
And the smoke, it encircled his head like a wreath;
He had a broad face and a little round belly
That shook when he laughed, like a bowl full of jelly.
He was chubby and plump, a right jolly old elf,
And I laughed when I saw him, in spite of myself;
A wink of his eye and a twist of his head
Soon gave me to know I had nothing to dread;
He spoke not a word, but went straight to his work,
And filled all the stockings; then turned with a jerk,
And laying his finger aside of his nose,
And giving a nod, up the chimney he rose;
He sprang to his sleigh, to his team gave a whistle,
And away they all flew like the down of a thistle.
But I heard him exclaim, ere he drove out of sight—
“Happy Christmas to all, and to all a good night!”
By the Numbers
“OPEC’S WORST NIGHTMARE – The US field production of crude oil reached 11.5 million barrels a day in September 2018, an all-time monthly record volume (based upon records maintained since January 1920) and a +21% increase in production in just the last 12 months (source: Department of Energy).” – Michael A. Higley, BTN 12-10-2018
If you have friends or family in need of financial life planning services,
It would be the honor of Laurence Lof Financial Advisors to assist them.
We value your referrals!
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These are the opinions of Larry Lof and Stephanie Mayoral and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Past performance is not indicative of future results. Due to our compliance review process, delayed dissemination of this commentary occurs.
The S&P 500 is an index of stocks compiled by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. The index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Indices mentioned are unmanaged and cannot be invested into directly.
Technical analysis represents an observation of past performance and trend, and past performance and trend are no guarantee of future performance, price, or trend. The price movements within capital markets cannot be guaranteed and always remain uncertain. The allocation discussed herein is not designed based on the individual needs of any one specific client or investor. In other words, it is not a customized strategy designed on the specific financial circumstances of the client. Please consult an advisor to discuss your individual situation before making any investments decision. Investing in securities involves risk of loss. Further, depending on the different types of investments, there may be varying degrees of risk including loss of original principal.