Friday, May 22, 2015 06:02am
North Adams, MA now: 45 °   
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: Quarter Ends With a Bang
By: Bill Schmick On: 01:59PM / Sunday April 03, 2011
Important
0
Interesting
0
Funny
0
Awesome
0
Infuriating
0
Ridiculous
0

The markets presented plenty of head fakes this quarter. In January, contrary to everyone's expectations, the gains of last year kept right on coming through most of the first quarter, only to hit a brick wall in March thanks to troubles in the Middle East followed by nature's one-two punch to Japan. Despite that, the indexes finished the first quarter with the best gains in over two decades.

The Dow racked up 742 points (6.4 percent), the S&P 500 Index gained 68 points (5.4 percent) while the NASDAQ closed up 128 points for a 4.8 percent gain. If we annualize those gains we could be looking at a 20 percent plus gain for the year, which puts my forecast of a 20-23 percent gain in 2011 right on target.

"It was a choppy quarter though," commented one client on Friday who lives in Dalton.

I agree. Clearly this market is exacting a price (higher stress and wear and tear on the nerves) for the gains we are making. I suspect that additional volatility is waiting for us as we continue to climb a wall of worry throughout this next quarter. Some of the concerns I believe will haunt us through the spring are the price of oil brought on by geopolitical turmoil, continued problems among European financial institutions and, of course, the end of QE II, which occurs in June.

Can the economy continue to grow without the multibillion dollar monetary stimulus that the Fed has been providing for well over a year? The economy appears to be growing and unemployment declining, but is that a function of real demand or simply a response to the Fed's easy money policies? How will the stock and bond markets react to an end to this stimulus?

Smarter people than I are expecting a rapid and disastrous response by the bond markets to the sunset of QE II. They believe that interest rates will immediately spike, disrupting what little lending is already occurring and thereby throwing the economy back into recession. I find that hard to believe.

I'm going to give our central bankers, led by Ben Bernanke, the benefit of the doubt. They read the same papers we do and are well aware of the fears of the markets. Is it really plausible that the Fed will step out of the game and simply watch from the bleachers if the doomsayers are right?

There is simply too much at stake and Ben Bernanke knows it. I believe the process of pulling out of the market will be a managed one. For those who pay attention to "Fed Speak," I maintain that process is already at work. Recently a number of Board Governors who have granted interviews advised the financial community that the Fed will be taking a more neutral policy position in regards to stimulus in the future.

That's not to say there won't be concerns and with them volatility. Skittish investors will always jump the gun, many times before they actually have the facts. In today's markets, trading on rumors is just as viable as trading on the facts. So prepare for some rough sailing; but I get ahead of myself.

As a portfolio manager, it's part of my job to fret and worry about what will be, instead of enjoying what is. And a rising market is what we can expect over the next few months. Sure, we can and will have down days, but I believe they will be short and shallow. Commodity stocks will lead, so make sure you have some exposure to those sectors, and if you haven't yet, get back into the stock market — now.

Bill Schmick is an independent investor with Berkshire Money Management. (See "About" for more information.) None of the information presented in any of these articles 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 (toll free) or e-mail him at wschmick@fairpoint.net. Visit www.afewdollarsmore.com for more of Bill's insights.



0 Comments
Tags: stocks, Federal Reserve      
News Headlines
Pittsfield Community Connection Introduces Team Fighting Youth Violence
Adams Library Rededication To Take Place Saturday
iBerkshire Tag Sales: May 22-24
Lanesborough FinCom Will Support Mount Greylock Budget Request
Dr. Merselis Awarded Honorary Business Doctorate From Antioch
McCann Tech Grad Interns on Fenway Grounds Crew
Adams Board of Health 'Blindsided' by Code Officer Cut
Pittsfield Councilors Calling For Engineering Study On City Hall
Majority of McCann Teachers Should Recieve High Evaluation Scores
Williams Women's Tennis Wins 7th NCAA Title in Eight Years

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 (169)
Independent Investor (228)
Archives:
May 2015 (4)
May 2014 (3)
April 2015 (8)
March 2015 (6)
February 2015 (7)
January 2015 (9)
December 2014 (7)
November 2014 (4)
October 2014 (9)
September 2014 (5)
August 2014 (7)
July 2014 (2)
June 2014 (6)
Tags:
Metals Taxes Euro Greece Oil Fed Pullback Banks Deficit Markets Election Retirement Federal Reserve Jobs Fiscal Cliff Congress Economy Rally Selloff Housing Japan Energy Debt Ceiling Commodities Stimulus Stock Market Stocks Crisis Interest Rates Recession Europe Debt Currency Bailout Europe
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: How Will Wall Street II Play on Main Street?
The Independent Investor: Why Are Interest Rates Rising?
Recent Entries:
The Independent Investor: Will Memorial Day Kick Off a Strong Summer?
@theMarket: Another Record High
The Independent Investor: Millennials & Money
The Independent Investor: Avian Flu Scrambles the Egg Business
The Independent Investor: Does Another Trade Pact Make Sense?
@theMarket: Buy on the News
The Independent Investor: Should You Manage That 401(k)?
@theMarket: Right Back Into the Range
The Independent Investor: Brazil Not For the Faint of Heart
@theMarket: Earnings on Deck


SB: Hoosac Valley at Lenox
Megan Goyette pitched a two-hiter and Kali Puppolo went...
Senior Citizen Prom 2015
Drury High School Sociology Classes hosted the Senior...
T&F: Drury @ Hoosac
The Drury girls took the last track and field events Friday...
T&F: PHS @ Taconic
Jay Doucette won the 100 meters and shot put and placed...
BArT Prom 2015
Berkshire Arts & Technology Public Charter School held its...
Drury High Prom 2015
Drury High School held its prom at the school on Saturday...
Lenox Prom 2015
Lenox High School students were announced as they made...
Mount Everett Prom 2015
Mount Everett School held its prom at Crissey Farm in Great...
MCLA Graduation 2015
The Massachusetts College Of Liberal Arts Class of 2015...
Spring Neighborlies 2015
The Northern Berkshire Community Coalition had its...
UNO Community Center Opens
The United Neighborhood Organization (UNO) in North Adams...
Lacrosse: Wahconah at...
When the Pittsfield boys lacrosse team met with Wahconah on...
Girls Lacrosse: Mt Greylock...
Sarah Stripp scored five goals and added three assists to...
SB: Sabis at McCann Tech
Haley Malloy struck out 10, and Taylor Sprague went 3-for-4...
SB: Lee at Hoosac Valley
The Hoosac Valley softball team got a quick lead en route...
Lacrosse: Taconic at Wahconah
The Wahconah boys lacrosse team defeated Taconic Monday...
SB: Hoosac Valley at Lenox
Megan Goyette pitched a two-hiter and Kali Puppolo went...
Senior Citizen Prom 2015
Drury High School Sociology Classes hosted the Senior...
T&F: Drury @ Hoosac
The Drury girls took the last track and field events Friday...
T&F: PHS @ Taconic
Jay Doucette won the 100 meters and shot put and placed...
BArT Prom 2015
Berkshire Arts & Technology Public Charter School held its...
| 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