2015 Stock Market Review

Please double click the link below for a 2015 year-end financial market review plus a 2016 outlook.

JCIM Q4 2015 Update

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Tuesday Morning Reads–investors aren’t impressed with 2016

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Some things I’m reading this morning:

  • Investors see 2016 and they aren’t impressed (IBD)
  • U.S. stocks were hurtin’ even before Monday’s rout (LAtimes)
  • Recession talk is premature (EconomistsView)
  • A painful year for the contrarian trade (WealthOfCommonSense)
  • Byron Wien’s big surprises for 2016 (BusinessInsider)
  • Will the stock market’s house of cards collapse in 2016 (MarketWatch)
  • This may be 2016’s biggest threat (ProjectSyndicate)
  • Why it took 10 years to get ‘Making a Murderer’ to audiences (TheFrame)

Thursday Morning Reads–Fed hikes rates as expected

Links17662Some things I’m reading this morning:

  • Janet Yellen’s new hat:  Risk Manager (NYT)
  • The Fed statement has a few surprises, all tilted toward the dovish (PIMCO)
  • Fed increase is the most important thing ever. Oh, wait (Bloomberg)
  • Will Third Avenue mark the beginning of a crisis? (Telegraph)
  • 10 dividend stocks for safe income as rates rise (Marketwatch)
  • Surprise, surprise, Tom Lee is bullish on the market for 2016 (BusinessInsider)
  • ‘Star Wars: the force awakens’ delivers thrills, with a touch of humanity (NYT)

Wednesday Morning Reads–hedge funds are getting crushed

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Some things I’m reading this morning:

  • Major hedge funds are getting crushed, including David Einhorn’s Greenlight Capital (DealBook)
  • The Emerging Market rout continues (WealthOfCommonSense)
  • Fool’s game to time this market (YahooFinance)
  • ADP: private employment number out this morning (CalculatedRisk)
  • 5 forces driving the global selloff (WSJ)
  • Maybe this global slowdown is different (Bloomberg)
  • Bernstein: the obfuscating start of the John Fox era(CBSlocal)

Tuesday Afternoon Reads–shares fall on bleak Chinese manufacturing data

links2Some things I’m reading this afternoon:

  • Shares fall on bleak Chinese manufacturing data (Dealbook)
  • Market pullback:  1997 or 1998?  Or 2011 or 2014 (FV)
  • The 1998 Playbook (PragCap)
  • Most volatile two weeks for crude oil since the financial crisis (Bespoke)
  • For 99 percent of investors, volatile markets with zero leadership mean do less, do it slower and keep it small (HowardLindzon)
  • Short-termism (AQR)
  • Market pundits weigh impact of recent volatility (Barrons)

Tuesday morning reads: a warning on China seems prescient

Some things I’m reading this morning:

  • Stock futures are decidedly up (Bloomberg)
  • A warning on China seems prescient (Dealbook)
  • Global stock markets rebound despite continued selloff in China (NYtimes)
  • What to do during market volatility? Perhaps nothing (Vanguard)
  • El-Erian: this is not 1998 or 2008 (Bloomberg)
  • Shoddy Chinese-made stock market collapses (TheOnion)

what happens next?

After a brutal day where the S&Ps dropped over 100 points at the open, came back to close to flat by lunch time only to finish down 77 points (-3.9%), the market is now down 10% during the month of August.  Morgan Housel writes:

…the market is where we are today [down 10%+] or lower from its previous all-time high about half the time. And again, that’s during a period when the market made millionaires out of modest savers.

Some more numbers for you: Historically, about one-third of 5% declines go on to become 10% declines. And about half of 10% declines go on to become 20%+ declines.

So, think about that. Stocks are down about 10% from their all-time high. Historically, half the time this happens they fall another 10% or more.

Now for the Good News…Everything about successful investing comes back to one thing: The long run.

After a 10% drop, stocks are higher five years later 86% of the time. The average return during that period is 51%, which is great. If the market were to fall 20% from its all-time high, historically it’s been higher five years later 89% of the time. There are no sure things in investing, but that is darn close.

You can read the full article here:  What Happens Next?

perspective

low until 8.24.2015

Less than two hours left in the today’s trade, but the day is far from over.  Regardless, this one chart will provide some perspective.  Yes, the recent drop in the stock market has been swift and aggressive (the line to the upper far right of the chart from 2,100).  Yet, the market has also risen drastically off of the March 2009 lows.