Journal to portfolio afterlife

[portfolioafterlife]

 

[portfolioafterlife]

 

[portfolioafterlife]

The remarkable strength of the UK consumer is finally starting to crack. Higher bills for household energy, more expensive fuel, pricier groceries and rising interest rates are beginning to take their toll on shoppers.
Consumer confidence slumped in April, as energy prices soared and national insurance contributions rose. GfK’s measure of consumer confidence slumped to -38, a level last seen in the early 1990s as well as in 2008.

Data from Barclaycard showed that consumer credit and debit-card spending rose 18.1% in April, compared with the corresponding period in 2019, marking the highest uplift since October 2021.

British Consumers Are Finally Starting to Crack

Consumer confidence in the UK is slumping, as higher bills for energy, fuel and groceries weigh on consumers.

www.bloomberg.com

 

[portfolioafterlife]

Will Bitcoin Prices Keep Falling? Ask the Fed – Crypto Banter

www.cryptobanter.com

 

[portfolioafterlife]

7 Questions I Have About Stocks & The Economy - A Wealth of Common Sense

Some questions I'm pondering right now.

awealthofcommonsense.com

 

[portfolioafterlife]

In most years (76% of the time since 1989), earnings and stock prices move in the same direction, but the magnitude is often far from equivalent. For example, in 1998 earnings rose 0.6% while stock prices advanced 26.7% and in 2001 earnings declined 30.8% while stock prices declined only 13.0%. And in 2021, we saw the widest differential ever, as stock prices rose 26.9% while earnings surged over 70%.

In 1991, earnings fell 14.8% while stock prices rose 26.3%. The result: a multiple expansion of over 48%, moving the P/E ratio on the S&P 500 from 14.6 to 21.6.
In 2020, earnings fell 22.1% while stock prices rose 16.3%. The result: a multiple expansion of over 49%, moving the P/E ratio on the S&P 500 from 20.6 to 30.7.
When changes in prices exceed changes in earnings, multiples expand. When changes in earnings exceed changes in prices, multiples contract.

Why are multiples contracting this year? Take your pick: lower earnings expectations, worsening economic outlook, tightening central bank policy, rising interest rates and inflation, war, etc.

The Stock Market is a Voting Machine

“Hence the prices of common stocks are not carefully thought out computations, but the resultants of a welter of human reactions. The stock market is a voting machine rather than a weighing machine. It responds to factual data not directly, but only as they affect the decisions of buyers and...

compoundadvisors.com

 

[portfolioafterlife]

We spend much of our time trying to find the best investor, company, fund or story, and not enough time thinking about the odds.

Why don’t investors like thinking in terms of odds? There are two reasons – because its less exciting than the alternative, which is largely storytelling, and because it is perceived as too difficult.

Thinking about odds and probabilities is not intuitive and often uncomfortable, but it should be essential for all investors. It is far better to be an average investor with the odds on our side, than a good investor with the odds stacked against us.

What Are the Odds of Making a Good Investment?

Last week I stumbled upon an old Grantland article by David Hill titled: “Can’t Knock the Hustle”. [i] It is a fascinating examination of the two faces of competitive pool in the US. On one side wa…

behaviouralinvestment.com

 

[portfolioafterlife]

In 9 of 10 instances, the S&P 500 peaked and turned lower prior to the recognition of a recession.

The Right Strategy Is Critical When Investing During A Recession! - RIA

Investing during a recession can be done but must be a well-thought-out strategy to weather higher volatility and potential drawdowns.

realinvestmentadvice.com

 

[portfolioafterlife]

A bear market reading list

abnormalreturns.com

 

[portfolioafterlife]

t’s important to be aware of sequence of returns as a potential risk because of the havoc it can wreak for retirees, especially if the adverse sequence happens early in retirement. But sequence of returns is much less of an issue for well-diversified portfolios, even during weaker periods for bonds. Despite the often alarming headlines in today’s market, there’s no need for retirees to panic.

Don't Panic on Sequence of Returns

Both stocks and bonds are down so far this year, but the long sweep of history provides some solace for recent retirees.

www.morningstar.com