Home About Archives RSS Feed

@theMarket: Hanging In There

By Bill Schmick
iBerkshires Columnist

Russia's attempted annexation of the Ukraine, China's internal economic woes, the less than auspicious enrollment numbers in Obama's health care initiative are just a few of the difficulties that the stock market has had to overcome this week. Given the news, stocks are hanging in there.

There's hardly a day goes by that someone, somewhere isn't calling a top to this market. The bears are doing their utmost to get a good old-fashioned rout going but investors by and large are ignoring their overtures. On down days, the volume dries up because most investors resist the temptation to sell. Only day traders appear willing to sell the market and even they are right back in again at the first sign of an uptick.

The market's momentum is clearly higher. That does not mean we are immune from bouts of profit-taking. This week, for example, the markets hit a three week low but it appears that these declines simply set us up for another move higher.

Those who are already invested are willing to sit through this consolidation phase. Those who are not yet in stocks are increasingly willing to buy on any dips, no matter how shallow. As one client recently said, "there is no place else to go, if you want to earn a decent return."

At this point in this bull market, it is not unusual to see the big gains of last year taper off to a slow grind higher, interspersed with fits of moderate selling. Sure, some individual stocks are still accumulating big gains or losses but the indexes are for the most part trading sideways.

Given the overseas background noise, the U.S. market's ability to absorb bad news is even more impressive. Events in the Ukraine this weekend will further test the market's staying power. Russia has engineered a sham voter referendum in the Crimea on Sunday. It is widely expected that the rigged results will give Vladimir Putin an excuse to annex that region.  There is little the West can do to stop it outside of military intervention, which is not on the table.

Economic sanctions by the U.S. and Europe, on the other hand, might hurt a bit but can go only so far before Russia retaliates by shutting off Western Europe's gas shipments. I can’t help but compare Putin's actions with those of Adolph Hitler prior to World War II when he annexed Austria and several other nation states unopposed.

At the same time, investors are concerned that China, once the economic locomotive of world growth is gradually turning into at best a weak caboose. As most readers know, speculation is rampant in China and has been for years. The real estate, financial and commodities markets have reached bubblelike proportions and the government is endeavoring to deflate the excesses without puncturing the balloon. How and to what extent they are successful have implications for markets worldwide.

As for you, my readers, I advise you do nothing during these short-term tempests, regardless of whether the teapot is in this country or somewhere overseas. The issues I see on these foreign fronts simply argue for remaining here in the U.S. market, which increasingly looks like a safe haven.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

0 Comments
     

Support Local News

We show up at hurricanes, budget meetings, high school games, accidents, fires and community events. We show up at celebrations and tragedies and everything in between. We show up so our readers can learn about pivotal events that affect their communities and their lives.

How important is local news to you? You can support independent, unbiased journalism and help iBerkshires grow for as a little as the cost of a cup of coffee a week.

News Headlines
Pittsfield Reconvenes Resource Recovery As Trash Talk Starts Over
MCLA Women's Lacrosse Falls at Mass Maritime
Williams Softball Rallies Past Middlebury
Doe Saved From Adams Flood Chute
'Ready Player One': It's All a Game
Concert Benefits Girls Empowerment
MCLA Presents 'Into the Woods'
Three Berkshire Communities Could Benefit as 'Opportunity Zones'
BCC Students to be Inducted Into National Honor Society
NCF Honors 13 Williams Students, Alumni

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 (255)
Independent Investor (348)
Archives:
April 2018 (5)
April 2017 (2)
March 2018 (6)
February 2018 (7)
January 2018 (7)
December 2017 (8)
November 2017 (5)
October 2017 (5)
September 2017 (5)
July 2017 (2)
June 2017 (8)
May 2017 (7)
Tags:
Banks Europe Bailout Selloff Election Energy Pullback Commodities Stocks Federal Reserve Jobs Crisis Euro Debt Ceiling Currency Wall Street Deficit Retirement Greece Taxes Economy Debt Rally Japan Europe Interest Rates Congress Housing Stimulus Recession Metals Stock Market Oil Fiscal Cliff Markets
Popular Entries:
The Independent Investor: Don't Fight the Fed
@theMarket: QE II Supports the Markets
The Independent Investor: Understanding the Foreclosure Scandal
@theMarket: Markets Are Going Higher
The Independent Investor: Does Cash Mean Currencies?
The Independent Investor: General Motors — Back to the Future
@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?
The Independent Investor: Will the Municipal Bond Massacre Continue?
Recent Entries:
@theMarket: Earnings Up; Stocks, Not So Much
The Independent Investor: Why the Tax Cuts Are Unpopular Among Americans
The Independent Investor: The Facebook Fallacy
@theMarket: The Trump Trade Bluff
The Independent Investor: Free Trade Vs. Fair Trade
@theMarket: Will April Be Better for the Markets?
The Independent Investor: Financial Planners Held to Higher Standard
@theMarket: Trump's Trade Wars Sink Markets
The Independent Investor: Medicare Premiums and Your Income
@themarket: Trump's Tariff Talk Trashes Global Markets