Thursday, August 27, 2015 05:04pm
North Adams, MA now: 70 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
LOG IN | REGISTER NOW   

Home About Archives RSS Feed
@theMarket: Expect More Volatility Ahead
By Bill Schmick On: 09:47AM / Saturday April 14, 2012
As we enter the second quarter, this first week is a taste of things to come. After months of enjoying a straight-up stock market, we are getting back to the new normal, so strap on your seat belts.

Monday and Tuesday were downright ugly. The next two days we climbed back up and then on Friday gave some back. It was a roller coaster and is reminiscent of the period from May through October of last year. Imagine that.

It was a down week, despite a surprise upside earnings surprise from Alcoa, which is usually the first company to report each quarter. Further good news from some big banks failed to inspire the market, however. Once again, as I wrote last week, the rain in Spain has flooded our plain.

Spanish banks borrowed twice as much from the European Central Bank in March as they did in February amounting to $419 billion. The ever-present angst among European investors has focused on Spain this month. Next month (or week) it could be Italy, Portugal or that popular whipping boy, Greece, that's back in the news.

Underlying the recent climb in Spanish sovereign bond yields is a brewing housing crisis and a faltering economy. Spanish banks are also bleeding. They are grabbling with 300 billion euros in property loans and the Spanish government has said it isn't prepared to inject any more capital into the sector. It's the same old song that will most likely end in another bailout for Spain.

I shouldn't blame Spain for all our worries. China's slowdown has also contributed to investors' worry. The annual rate for Chinese GDP growth slowed in the first quarter to 8.1 percent from 8.9 percent. I wish our growth could be even half that rate but everything is relative. And relative, in the context of Chinese economics, equates to slower growth, slower demand for materials and commodities, and a host of other goodies that the world depends on to drive their own economies. A hard landing in China coupled with a recession in Europe would not be an auspicious development for world economic growth. Right now the state of China’s economy is muddy at best.

As for our markets, the decline I have expected has begun. Pullbacks vary. If we take a look at the last nine times the markets have declined going back to mid-2010, we see that the longest correction was 22 days. The average was 15 days. Snap-back rallies can last from two days to seven days. This week's snap-back lasted two days.

What is clear is that volatility increases substantially during times like these. My advice: do not try to trade the ups and downs. You will be left with a big hole in your portfolio and end up losing far more than the market corrects. If you had decided prior to this pullback that you were going to stick with the markets, then do so, take your lumps and look to the long term.

If you followed my advice and raised cash, it is time to be patient, watch the markets gyrate but don’t let that cash burn a hole in your pocket. Patience in this kind of environment is worth its weight in gold.


0 Comments
     
News Headlines
Triad Holds Annual Picnic at Greylock Club Pavilion
Adams Inviting Residents to Get Involved in Strategic Planning Process
Adams to Look Into Expanding Solid Waste Services
Mount Greylock Officials Make Case for School District
Economist Urges Berkshires To Build Around Strong Non-Profit Economy
North Adams Committee Reviewing Online Information Access
BRTA Details Regional Transit Plan
Williamstown Selectmen Debate Cost Saving Vs. 'Green' Action
Mercier Named Administrator of Mount Carmel Care Center in Lenox
The Classical Beat: Chamber Concerts Blossom Throughout Region

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (177)
Independent Investor (241)
Archives:
August 2015 (5)
August 2014 (2)
July 2015 (6)
June 2015 (8)
May 2015 (6)
April 2015 (8)
March 2015 (6)
February 2015 (7)
January 2015 (9)
December 2014 (7)
November 2014 (4)
October 2014 (9)
September 2014 (5)
Tags:
Debt Ceiling Congress Economy Markets Metals Jobs Euro Fed Debt Fiscal Cliff Oil Retirement Recession Stocks Commodities Currency Election Housing Bailout Interest Rates Stimulus Japan Federal Reserve Greece Crisis Selloff Energy Europe Rally Banks Stock Market Europe Taxes Deficit Pullback
Popular Entries:
The Independent Investor: Don't Fight the Fed
The Independent Investor: Understanding the Foreclosure Scandal
@theMarket: QE II Supports the Markets
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: Will the Municipal Bond Massacre Continue?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
The Independent Investor: How Will Wall Street II Play on Main Street?
Recent Entries:
@theMarket: Markets Are Supposed to Pullback
The Independent Investor: Not All Bonds Are the Same
The Independent Investor: The Risk of Rising Rates
The Independent Investor: Boomers' Kids Don't Want Your Stuff
@theMarket: Month-End Musings
The Independent Investor: Supermarkets Evolve to Survive
The Independent Investor: Are You Ready for El Niņo
@theMarket: O Ye of Little Faith
The Independent Investor: When 'No' Means 'Yes'
@theMarket: Global Markets Weather a Wild Week


Whitman's Wins Torchia League...
The Pat Torchia Women's Softball League playoffs concluded...
Berkshires Craft Beer Fest...
The 9th annual Western Mass beer festival drew hundreds of...
Pat Torchia Women's Softball...
Whitman's took the first game in the best two out of three...
Third Thursday August 2015
It was another beautiful night for 3rd Thursday on North...
Berkshire Chamber @ Darrow...
The Berkshire Chamber of Commerce held its monthly...
Shire City Sessions August...
Wild Adriatic performs at Monday's Shire City Sessions, a...
BYP Networking @WTF
The Berkshire Young Professionals held its networking event...
Softball: VFW Post vs Pizza...
VFW Post vs Pizza House at DiSanti field on Monday night.
Second Cheshire Block Party
Cheshire resident enjoyed good food and music by the...
Downtown Celebration 2015
The annual Downtown Celebration brought hundreds to Main...
Pittsfield Ethnic Fair
Pittsfield Ethnic Fair was held at the Pittsfield Common on...
Annual Cruz Nite And...
Cheshire residents enjoyed classic cars, good food, a BMX...
Adams National Night Out 2015
Adams recognized its first responders on Tuesday night...
National Night Out 2015
Neighborhoods in North Adams marked the annual National...
Adams Aggie Demo Derby 2015
Crash! Boom! Bang! The annual Aggie Fair demolition derby...
Blue Moon Rooftop Party
Partygoers danced under a blue moon atop Greylock Gardens...
Whitman's Wins Torchia League...
The Pat Torchia Women's Softball League playoffs concluded...
Berkshires Craft Beer Fest...
The 9th annual Western Mass beer festival drew hundreds of...
Pat Torchia Women's Softball...
Whitman's took the first game in the best two out of three...
Third Thursday August 2015
It was another beautiful night for 3rd Thursday on North...
Berkshire Chamber @ Darrow...
The Berkshire Chamber of Commerce held its monthly...
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings |
Advertise | Recommend This Page | Help Contact Us
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2012 Boxcar Media LLC - All rights reserved

Privacy Policy| User Agreement