04.22.16 - For immediate release.
It's either sadness or euphoria...
Investors are swinging wildly between sadness and euphoria over stocks at breakneck speed. Market observers and investors who've decided to sit this out are watching the action and are concluding that they want no part of it. And who could blame them?
CLICK pic to watch - Billy Joel: Summer Highland Falls. "It's either sadness or Euphoria..."
|Billy Joel - Live @ Shea Stadium!
It doesn't matter to them that the major averages are very close to all time highs. The majority if investors, baby boomers, have binged on stocks in the past and they simply won't be goaded into getting screwed again. Earning virtually nothing from cash equivalents and fixed income has them anxiety prone. They smartly (hopefully) have put limits on how much they can invest in dividend paying stocks because (again - hopefully) they know that a 4% dividend yielding stock can get cut in half in a heartbeat.
I've said it before and it bears repeating: Nothing that is safe pays a decent yield and nothing that pays a decent yield is safe.
Something happened today that bears watching with a pretty high level of concern; the stock market lost it's leadership today. Google, Microsoft, Visa, and Starbucks disappointed investors with either their Q1 results or their outlook for the rest of 2016.
There are three things that can happen when the leaders fall down:
1. They recover and continue to lead the market higher.
2. The rest of the market follows them lower.
3. New leaders emerge to take the market higher.
Well, new leaders don't just magically appear. It should take at least another quarter to see if those aforementioned leaders were able to turn things around, which is not much time, or the rest of the market follows them lower.
So, this is what the Street is going to be watching for a while. And as we move between the 3 options above, stocks should continue to yo-yo up and down without much discernible progress. Be patient. Buy quality on dips. Buckle up.
I'll keep you posted,
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All the views expressed in this report/commentary accurately reflect our personal views about any and all of the subject securities or issuers and no part of our compensation was, is, or will be, directly or indirectly related to the specific recommendations or views we have expressed in this report. This material is not intended as an offer or solicitation for the purchase of sale of any security or other financial instrument. Securities, financial instruments, or strategies mentioned herein may not be suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue. Prices, values, or income from securities or investments mentioned in this report may fall against your interests, and you may get back less than the amount you invested. The information contained in this report does not constitute advice on the tax consequences of making any particular investment decision. You should consult with your tax adviser regarding your specific situation. Diversification is a method of managing risk and doesn't protect against loss in a down market.