Did you hear the news? Did you see the reports? Did you read the social media posts?
U.S Small Cap Value stock funds were up about 12% in January 2019.
U.S. Real Estate Investment Trust (REIT) funds were up over 11%.
The ACWI stock index was up about 8% in January. (That’s the MSCI ACWI: Morgan Stanley Capital International All-Country World Index.)
Did you hear or see this news? Probably not, for two reasons.
First, the media primarily reports bad stock market performance that scares investors and garnishes attention.
Second, the media reports only U.S. large company stock indices such as the Dow Jones Industrial Average, Standard & Poor’s 500, and NASDAQ. The media rarely reports good stock market performance or returns on a broad range of asset classes.
Shifting to future forecasts, did you cheer for the Los Angeles Rams in the Super Bowl? As an investor, you should have, based on the Super Bowl Predictor that states (I’m simplifying here) the stock market goes up if an NFC team wins and goes down if an AFC teams wins.
But don’t worry about the fact that the AFC New England Patriots won, because the predictor has only had a 48% success rate since 1998—about the same luck as flipping a coin. The Super Bowl Predictor proves that there is no easy, consistent way to predict the short-term direction of the stock market.
Do you have money parked in a local bank savings account? If so, what is the interest rate? If it is lower than 2% or so, we recommend you consider an online savings or money market account. There are two primary categories:
Online banks like Ally Bank, Barclays or Synchrony
Credit card-affiliated bank accounts like American Express Personal Savings, Capital One 360 Money Market Fund, and Discover Online Savings
A simple internet search will generate a long list. The credit card company-affiliated banks may offer the advantage of using the same website as your credit card, hence avoiding the need for one more username and password. These online savings accounts can be linked to your bank checking account for easy, electronic transfers within one to three days. Please contact us if you’d like to discuss further.
Noting another forecast, the groundhog has only about a 40% accuracy rate, but we hope he is right with his prediction of an early spring!
As always, please contact us with any questions, news, or comments.