A Review of Economic and Market Indicators

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By: Maurice Stouse

Financial Advisor and Branch Manager

Unemployment remains steady at 3.9%.  A record number of Americans are at work. Some reports say there are more job openings than people looking for work.  Corporate profits, year over year, are up 16%. Recent tax cuts have enhanced corporate earnings. Interest rates (the current bellwether being the 10 year Treasury note) remain under 3% — 2.93% at this writing. Inflation has averaged 2.9% over the past 12 months according to the US Bureau of Labor Statistics. And wage growth has finally started to move up, averaging 2.9%, the highest rate of increase since 2009. In turn, investors have continued to bid up stocks with the S&P 500 up 17% in the past 12 months. Among the equity or stock sectors (there are eleven that comprise the market); Information Technology leads the way with year over year growth of 29%, followed closely by the Consumer Discretionary sector at 28%. Utilities and Consumer Staples are the laggards down .05% and 1.6% respectively. (Source Raymond James & Associates, Inc.).

Looking at commodities, crude oil is up 28% while Natural Gas is down 7.6%. Gold prices have declined 10% over the past 12 months.  The Commodities Index is down 3.8% as well. Lastly, the dividend yield of the S&P 500 is at 2.13% (source Raymond James & Associates).

There’s a lot of numbers out there. What is an investor to conclude or to do with all of them? These numbers are statistics, similar to what you look at when assessing the weather as you make your own plans and preparations. Also, you consider the season when assessing the weather. The markets can be like the seasons with their own summer, fall, winter and spring. The markets, like the weather, can move rather quickly but oftentimes investors find themselves being reactive to movement versus proactive or more importantly, not staying the course to achieve their goals.

Where should an investor start?  One place to begin for many people over the decades is reading the book The Intelligent Investor, by Benjamin Graham. I highly recommend it. It was first published in 1949. Ben Graham is considered the father of value investing (Warren Buffett is one of his many disciples).  In the book you will find a lot of thought on investing over time. Near the beginning for example, the book states that investors should never be more than 75% in stocks or less than 25% in to stocks. And the same is said for bonds. Asset allocation is considered to be a significant part of any investor’s strategy. And the same can be said for consistent rebalancing as well as keeping an eye on tax efficiency.  Cost is a critical component, as well as quality of service and responsiveness. Time frame, risk tolerance and the ultimate goal for an investor are the points from where to start. Contact or visit with an advisor today to start or continue the conversation on developing your plan or reviewing it and keeping it on track.

Maurice Stouse is a Financial Advisor with First Florida Wealth Group and Raymond James and he resides in Grayton Beach.  He has been in financial services for over 30 years. His office is located at First Florida Bank, 2000 98 Palms Blvd, Destin, FL 32451. Phone 850.654.8124. Raymond James advisors do not offer tax advice. Please see your tax professionals. Email: Maurice.stouse@raymondjames.com.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC, and are not insured by bank insurance, the FDIC or any other government agency, are not deposits or obligations of the bank, are not guaranteed by the bank, and are subject to risks, including the possible loss of principal. Investment Advisory Services are offered through Raymond James Financial Services Advisors, Inc. First Florida Wealth Group and First Florida Bank are not registered broker/dealers and are independent of Raymond James Financial Services.

Views expressed are the current opinion of the author and are subject to change without notice. Information provided is general in nature, and is not a complete statement of all information necessary for making an investment decision, and is not a recommendation or a solicitation to buy or sell any security. Past performance is not indicative of future results. There is no assurance these trends will continue or that forecasts will occur. Investing always involves risks and you may incur a profit or a loss. No investment strategy can guarantee success.

The S&P 500 is an unmanaged index of 500 widely held stocks. Keep in mind that indexes are unmanaged and individuals cannot invest directly in the index. Index performance does not include transaction costs and other fees, which will affect the actual investment performance. Individual investor results will vary.

Holding stocks for the long term does not insure a profitable outcome. Commodities and currencies investing are generally considered speculative because of the significant potential

for investment loss. Their markets are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Gold is subject to the special risks associated with investing in precious metals, including but not limited to:price may be subject to wide fluctuation; the market is relatively limited; the sources are concentrated incountries that have the potential for instability; and the market is unregulated.

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