Home About Archives RSS Feed

@theMarket: Nowhere Land

By Bill SchmickiBerkshires Columnist

Most of the stock market went nowhere this year. With the exception of the NASDAQ, the rest of the market returned investors less than the average yield of a yearly CD.

It was a disappointing year, to put it mildly. Recall the months of tension as the markets gyrated between up 3 percent and down by about the same amount. Then August hit and the markets declined precipitously, with the Dow Jones Industrial Average collapsing 1,000 points in a matter of minutes. Sure, the markets recovered, but if you had tried to trade that downdraft, you would have lost even more money, because the markets turned on a dime in October with no warning and recouped all of its losses.

What's worse is that all the culprits that generated negative returns for stocks are still with us. The declining price of oil continues to ravage investors. You may wonder why declining energy prices should be such a negative for the stock market. Conventional wisdom says that if prices continue to decline, the chances of bankruptcies in the energy patch escalate and that is negative for stocks.

I may disagree, but at the same time you don't argue with the markets when they get obsessed over something. No matter how crazy or irrational, you have to go with the flow until the flow changes. Then there is investors' angst that the central bank will raise rates again and again despite the anemic 2.2 percent growth of the economy. If they do raise rates 3 or 4 times in 2016, investors fear that it will crater the economy.

Finally, global growth continues to be anemic with China's growth the main concern. As China's economy (the second largest in the world) struggles to find its footing, the country's demand for natural resources also slows. This has caused the price of all kinds of commodities to go into free fall. But we know all this.

As we look ahead, one more uncertainty will gradually increase in importance in 2016.

The U.S. presidential elections will become a larger influence on the market as November approaches. At this point, most investors have no idea what candidates will ultimately face off in the fall.

In a presidential election year, there is normally a down draft in the stock markets sometime before November. How deep the sell-off and how long it lasts depends on a great many variables. Not least of which is investor's perceptions of who will win and what they will do differently from the old administration. The more unorthodox or radical the political platforms of the candidates, the more concern (and volatility) will be generated in the stock markets.

So for this coming year, investors should expect more of the same: volatility, angst, crazy swings in commodity prices, daily interest rate predictions from the Fed Heads and volumes of meaningless noise from the financial media. The days when you could just sit back and clip coupons or just assume a steady climb in stocks are over. You need to manage your investments now or find someone who can, and by the way, have a Happy New Year.

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.

     

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
Winter Garden Preparation Talk Set at Stamford Library
Weekend Outlook: Lee's Founder Weekend and More
North Adams Seeking Christmas Trees for the Holidays
Letter: That's Who We Are, Adams
Letter: Thank you, 1st Berkshire District!
Hoosac Valley School Committee Holds First Meeting of Academic Year
Pittsfield Wants People to Know Where Free Public Wifi Is
Score! Pittsfield's 'Mini-Pitch' is Ready for Goals
Companion Corner: Guinea Pigs at Berkshire Humane Society
Dalton Board of Health Updates Food Permit Fee System
 
 


Categories:
@theMarket (597)
Independent Investor (452)
Retired Investor (310)
Archives:
September 2026 (6)
September 2025 (1)
August 2026 (8)
July 2026 (10)
June 2026 (8)
May 2026 (9)
April 2026 (9)
March 2026 (7)
February 2026 (8)
January 2026 (8)
December 2025 (8)
November 2025 (8)
October 2025 (10)
Tags:
Election Economy Housing Wall Street Europe Euro Stimulus Stocks Greece Retirement Oil Rally Deficit Pullback Congress Bailout Debt Crisis Banks Energy Selloff Federal Reserve Debt Ceiling Fiscal Cliff Currency Metals Recession Japan Commodities Stock Market Interest Rates Mortgages Jobs Taxes Markets
Popular Entries:
The Retired Investor: The Hawks Return
The Retired Investor: Has Labor Found Its Mojo?
The Retired Investor: Climate Change Is Costing Billions
The Retired Investor: Time to Hire an Investment Adviser?
The Retired Investor: Crypto Crashes (Again)
The Retired Investor: My Dog's Medical Bills Are Higher Than Mine
The Retired Investor: Food, Famine, and Global Unrest
The Retired Investor: Holiday Spending Expected to Stay Strong
The Retired Investor: U.S. Shale Producers Can't Rescue Us
The Retired Investor: Investors Should Take a Deep Breath
Recent Entries:
@theMarket: Markets Cheer Fed Rate Hike
The Retired Investor: The Fed, the Treasury, and the bond market
@theMarket: Bonds Indicate Growing Dissatisfaction With Monetary & Fiscal Policy
The Retired Investor: U.S bond prices fall as oil prices and inflation expectations rise
@theMarket: Higher Bond Yields Keep Markets in Check
The Retired Investor: High Noon for the Bond Vigilantes
@theMarket: Nvidia Earnings Beat Pushes Markets Higher
The Retired Investor: Saver’s Match Offers Some Workers up to Half Their IRA Contribution
@theMarket: Bonds, Stocks Moving Together
The Retired Investor: Cost of Healthcare Cuts