Many stock markets around the world moved higher last week.
Investors’ optimism in the face of economic headwinds has confounded some in the financial services industry. Laurence Fletcher and Jennifer Ablan of Financial Times cited several money managers who believe investors have become complacent. One theory is investors’ buy-the-dip mentality has become so firmly ingrained that any price drop is seen as a buying opportunity, regardless of share price valuation.
Last week, major U.S. indices posted strong gains. That’s welcome news, but the drivers behind share price appreciation appear to have little to do with company fundamentals.
Fourth quarter earnings season is underway. During earnings season, companies let investors know how profitable they were during the previous quarter. With 45 percent of companies in the Standard & Poor’s 500 (S&P 500) Index reporting, earnings are slightly down. If the trend continues, this will be the fourth consecutive quarter of year-over-year earnings declines, according to FactSet.
Falling company profits, in tandem with rising share prices, have made U.S. stocks relatively expensive.
Prepare yourself. There is a good chance markets will be volatile in the coming weeks.
Precautions designed to slow the spread of the coronavirus may also slow Chinese economic growth and, by extension, global economic growth.
Not everyone is financially prepared for retirement. Earlier this year, the Employee Benefit Research Institute estimated almost 41 percent of American households will run short of money in retirement. That’s an improvement over 2014 when almost 43 percent of 35- to 64-year-olds were unprepared.
Since 2011, the number of Americans owning smartphones has increased from 35 percent to 81 percent, although there remains a significant digital divide, demographically. A Pew Research survey found the vast majority of younger Americans rely on smartphones, while just 53 percent of the 65-and-over crowd use the devices.1 Americans who have embraced the technology […]
On December 17, as part of a broader 2020 fiscal year appropriations bill, the U.S. Senate voted in favor of the Setting Every Community Up for Retirement Enhancement (SECURE) Act. President Trump signed it into law on December 20.