Walking Dead Stock Market

Highlights:

Like the number one TV drama, this unkillable stock market rally seems to get no respect.  While it has been impossible to kill so far this year despite all the shots fired at it, this is no mindless and shambling rally.  Stocks have deliberately moved past these events that did not stop the still beating heart of the economic growth in the United States.

Download the full Weekly Market Commentary article here: Walking Dead Stock Market

Jeffrey Kleintop, CFA
Chief Market Strategist
LPL Financial

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Is Investor Complacency Finally Ending?

Highlights

Last week, U.S. stocks suffered their worst drop in over nine months as a terrorist attack and poor economic and earnings data shook investor confidence. Breaking down last week’s market drivers may reveal insights about the likely future direction of the stock market.

Download the full Weekly Market Commentary article here: Is Investor Complacency Finally Ending? Is Investor Complacency Finally Ending?

Jeffrey Kleintop, CFA

Chief Market Strategist LPL Financial

April 22, 2013

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10 Indicators to Watch for a Spring Slide in the Stock Market

Highlights: In each of the past three years, the stock market began a slide in the spring that lasted well into the summer months.

This week, we update the status of the 10 indicators we identified that foreshadowed the 10 – 19% declines in recent years.

On balance, the indicators do not yet point to a significant risk of a repeat of the 10 – 19% spring slide this year. But a more modest, 5 – 10% pullback is far from out of the question.

Download the full Weekly Market Commentary article 10 Indicators to Watch for a Spring Slide in the Stock Market

Jeffrey Kleintop, CFA

Chief Market Strategist LPL Financial
March 25, 2013

LPL FINANCIAL RESEARCH

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Growing Gap Between Health of Consumers and Businesses

Highlights: Business demand is now strengthening as consumer spending power slumps. While in each of the past four years, consumer discretionary sector stocks outperformed the more business-spending oriented industrial sector stocks by a wide margin, they have started to lose their leadership.

A stall in the strength of consumer-driven stocks may help to keep the stock market in a range around the current levels even as the Dow Jones Industrial Average closes in on a new all-time high.

Download the full Weekly Market Commentary article Growing Gap Between Health of Consumers and Businesses

Jeffrey Kleintop, CFA

Chief Market Strategist LPL Financial
March 4, 2013

LPL FINANCIAL RESEARCH

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Shortest Blog Post Ever

There’s an old saying in the investment business that goes something like this: “The market will always move in the direction that causes the most pain for the largest number of people.”

Sometimes old sayings get that way because they contain a lot of wisdom.

I will probably expand on this theme in later posts, but for now I’ll just leave you with an interesting question: When was the last time you heard a friend bragging about the stock they just bought?

Perhaps my shortest blog post ever, but hopefully it gives you a lot to think about….

Joe Griffard, CFP®

Best Bull Market Ever… Now What? Weekly Market Commentary

Highlights: The three-year anniversary of the bull market took place on Friday, March 9. This has been the strongest bull market since WWII.

The average return in year four of prior bull markets was 12.9%, close to our 8 – 12%*
return expectation for 2012.

While the stock market faces significant challenges ahead, we expect another year of gains for stocks. But that gain may be accompanied by the return of volatility.

Download the full Weekly Market Commentary article Best Bull Market Ever… Now What?

Jeffrey Kleintop, CFA

Chief Market Strategist LPL Financial
March 12, 2012

LPL FINANCIAL RESEARCH

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Is the Stock Market Reality?

iStock_000017122997XSmallLast week, my friend Karl (name changed to protect the innocent) dropped by for an impromptu visit. While we see each other nearly every other week in passing, both of us have been pretty busy lately, so it was nice to have a few minutes to catch up one on one.

We ended up talking about the wild fluctuations that have occurred in the stock market lately, and how the market had been especially weak in late summer. Karl remarked that earlier in the year he had a bad feeling about the market, and had moved all of his 401k account balance into money market funds. Considering that the major indexes were a good bit lower, he was feeling pretty good about the decision and I could certainly understand why. I was pretty thankful that I had become defensive in many client accounts too.

I asked Karl when he planned to move out of cash, and he said “Well, I’m not sure. When I look at the news, I don’t see much reason to risk my money in the stock market.” Well, I couldn’t blame him. When I had scanned the newspaper that morning, I read stories about a debt crisis in Europe, a high unemployment rate here in the US, and protests in New York city…just to hit a few highlights. Eek. Hardly news items that inspire one to risk money in stocks, right?

But here’s the “big thought” I shared with Karl, and that you might find useful not only now, but in the future. It’s a simple truism that is often overlooked: Most people assume that the market is a true and accurate measure of current reality. It’s not. It’s more like a mirror held up that reflects back how all of us, large and small investors combined, feel about the future. If people are feeling cheerful about what they read in the paper, see on Facebook, or discuss with their friends over coffee, they are going to be more likely to take risk and put money in stocks. More buyers translates to higher prices, all things being equal. Conversely, when people are feeling blue, they are more likely to hunker down, to vote with their feet and put their money in safer assets. The law of supply and demand is not subject to repeal.

If you feel bad about the economy and world events, you are probably not alone, and that sentiment is quite likely “reflected” in market prices. If you wait until the news looks better, you will probably pay more for a “risk asset”. On the other hand, if the headlines on your favorite website are talking about how AWESOME the market is, or if everyone at the barber shop, beauty parlor, or cocktail party is talking about how a particular stock or market sector is a “can’t miss proposition”, you should think carefully about putting your hard earned dollars at risk. If all the news about a particular stock or market sector is good, what new piece of information would cause it to move even higher?

I’ll never claim to have all of the answers…if I did I wouldn’t work for a living. But, I’ve learned a few things from my years in the trenches. So, as I often say to my good friends, “I’m just sayin….”

I hope this was useful not only to Karl, but others who are also reading. Stay tuned for more posts soon.

Yours Truly,
Joe Griffard, CFP®

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.