Market insights and analysis

How dynamic, risk-managed investment solutions are performing in the current market environment

2nd Quarter | 2021

Market insights and analysis

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Updates on how dynamic, risk-managed investment solutions are performing in the current market environment.

This year has been somewhat like a master class, or real-time laboratory, in illustrating some classic concepts of behavioral finance in a compressed time frame. Think about it.

Most of the major stock market indexes gained last week. The S&P 500 Index was up 1.72%, the NASDAQ gained 3.69%, and the Russell 2000 small-capitalization index rose 0.88%. The Dow Jones Industrial Average was the only loser for the week, falling 0.16%. The 10-year Treasury bond yield fell about 6 basis points, as Treasury bonds gained slightly for the week. Spot gold gained more than 3.89% for the week.

Gold set new all-time highs last week, finishing at $1,985.90 per ounce. The precious metal is now in position to reach $2,000 per ounce.

The major stock market indexes fell last week. The Dow Jones Industrial Average lost about 0.75%, the S&P 500 Index fell 0.28%, the NASDAQ 100 dropped 1.52%, and the Russell 2000 small-capitalization index fell 0.39%. The 10-year Treasury bond yield fell about 4 basis points, as Treasury bonds gained ground for the week. Last week, spot gold gained more than 5%, behaving like a safe-haven asset as stocks took a break from their recent climb.

This column has explored the topic of risk management in some detail over the years, addressing several questions: • Are the retail investor and financial adviser underserved by the buy-and-hold philosophy? • What is the potential role of dynamic risk-managed strategies in investors’ portfolios? • How might modern, risk-managed portfolios be best constructed on a conceptual level?

Gold rose over 4.5% last week, approaching all-time highs in both spot prices and continuous futures contracts.

For more than four decades, I have been a professional in the investment business. Some may be surprised to find out, however, that finance wasn’t my first chosen career path.

The major indexes posted mixed performance last week. The S&P 500 gained 1.25%, the Dow Jones Industrial Average rose 2.29%, the NASDAQ lost 1.08%, and the Russell 2000 small-capitalization index gained 3.57%. The 10-year Treasury bond yield fell 1 basis point to 0.63% as Treasury bonds rose slightly for the week. Last week, spot gold closed at $1,810, up 0.65%. Optimism about the coronavirus vaccine and positive economic data were the primary drivers behind investors’ short-term decision-making last week.

Gold prices closed slightly up at $1,810.00 per ounce on Friday (July 17), as the bull market continued for the precious metal.

The major stock market indexes finished mixed last week. The Dow Jones Industrial Average gained 0.9%, the S&P 500 Index rose 1.7%, the NASDAQ Composite climbed 4.0%, and the Russell 2000 small-capitalization index lost 0.6%. The 10-year Treasury bond yield fell 3 basis points, as Treasury bonds gained ground for the week. Last week, spot gold closed at $1,798.70, up $23.32 per ounce, or 1.3%.

Businesses around the world have seen their sales dry up as people have restricted their movement in the wake of the pandemic. There has been much talk about how Amazon and other online retailers have bucked the trend. Another segment of the retail marketplace has also been thriving despite the virus fears.

Equities rallied in the second quarter after a pandemic-related sell-off in the first quarter. About 84.6% of OnTarget Monitors for the quarter were “in the yellow” or better, with 70.4% “OnTarget” (“in the green”) or better (“in the blue”).

Gold prices hit $1,829.80 per ounce last week, a nine-year high, before closing the week at $1,801.90 per ounce.

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June ETF Deathwatch contains 381 zombie ETFs and ETNs.

Last week, equity markets pushed higher, capping the shortened holiday week. The Dow Jones Industrial Average rose 3.20%, the S&P 500 gained 4.0%, the NASDAQ finished the week up 4.6%, and the Russell 2000 small-capitalization index locked in 3.85%. The 10-year Treasury bond yield rose 3 basis points to 0.67%, as Treasury bonds declined for the week. Last week, spot gold closed at $1,775.95, up 0.23%.

For most of us, “stress” is considered a bad word (and maybe an ever-present word these days). When we stress about work or relationships, we usually feel miserable.

Gold prices hit $1,800 per ounce last week, a level last seen back in 2011. This occurred as COVID-19 cases in the U.S. increased, causing many states to pull back on reopening.

The major stock market indexes fell last week. The Dow Jones Industrial Average lost 3.3%, the S&P 500 Index fell 2.9%, the NASDAQ Composite dropped 1.9%, and the Russell 2000 small-capitalization index fell 2.8%. The 10-year Treasury bond yield fell almost 5 basis points, as Treasury bonds gained ground for the week. Last week, spot gold rose 1.57%, behaving like a safe-haven asset as stocks took a break from their recent climb.

Several decades ago (far too many) I was a new MBA graduate and had entered the management trainee program at what is now one of the world’s largest fully integrated communications firms.

Gold prices reached a seven-year high last week, passing the previous high set back in mid-April. That high was followed by a trading-range consolidation pattern that lasted until last week.

The major stock market indexes gained last week. The Dow Jones Industrial Average gained 1.0%, the S&P 500 Index rose 1.9%, the NASDAQ Composite climbed 3.7%, and the Russell 2000 small-capitalization index advanced 2.2%. The 10-year Treasury bond yield fell 2 basis points, as Treasury bonds gained ground for the week. Last week, spot gold closed at $1,742.47, up $11.72 per ounce, or 0.7%.

Gold moved up toward the top of its current trading range last week, building support within the current bull market. It closed the week at $1,753 per ounce.

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Exposed

Like a skeleton found in a closet, investors discovered in the first quarter that their portfolios were not being managed in the manner in which they had believed.

Gold moved from the lower end to the middle of its current trading range last week. It closed the week at $1,737 per ounce. If this consolidation continues, it could provide support for more moves up in this bull market.

The major stock market indexes finished up again this week (the S&P 500 has gained more than 3% for three straight weeks). The Dow Jones Industrial Average gained 6.8%, the S&P 500 Index rose 4.9%, the NASDAQ Composite climbed 3.4%, and the Russell 2000 small-capitalization index rocketed 8.1%. The 10-year Treasury bond yield rose 24 basis point, as Treasury bonds tumbled. Last week, spot gold closed at $1,684.38, down $45.89 per ounce, or 2.65%.

Gold stayed inside the trading range it has been in for the last eight weeks, closing last week at the lower end of the range at $1,688.00 per ounce. This consolidation can now provide support for another run-up in the current gold bull market.

The major stock market indexes finished up this week. The Dow Jones Industrial Average gained 3.7%, the S&P 500 Index rose 3.0%, the NASDAQ Composite climbed 1.8%, and the Russell 2000 small-capitalization index rocketed 2.8%. The 10-year Treasury bond yield fell 1 basis point, as Treasury bonds were mixed. Last week, spot gold closed at $1,731.71, down $2.97 per ounce, or 0.17%.

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Last fall I wrote a couple of articles about how the financial industry and press may have been premature in reporting on the death of so many industry strategy favorites (you can read them here and here). The 60/40 balanced portfolio, value investing, hedge fund, and momentum strategies were all discussed.

After breaking through the resistance line established over the previous weeks, gold prices held at the same line extension, which had now become a support line. Gold resumed its uptrend, finishing last week at $1,751.70 per ounce.

The major stock market indexes finished up last week. The Dow Jones Industrial Average gained 3.3%, the S&P 500 Index rose 3.2%, the NASDAQ Composite climbed 3.4%, and the Russell 2000 small-capitalization index rocketed 7.8%. The 10-year Treasury bond yield rose 1 basis point, as Treasury bonds were down in general. Last week, spot gold closed lower at $1,754.40, down $13.60 per ounce, or 0.7%.

After breaking through the resistance line established over the previous four weeks, gold prices retraced to the same line extension, which has now become a support line (see the following chart). Gold finished the week at $1,735.59, still in an uptrend on the daily chart.

The major stock market indexes finished to the downside last week. The Dow Jones Industrial Average lost 2.6%, the S&P 500 Index fell 2.4%, the NASDAQ Composite slipped 1.2%, and the Russell 2000 small-capitalization index lost ground at a 5.6 % rate. The 10-year Treasury bond yield fell 4 basis points, advancing Treasury bonds higher. Last week, spot gold closed higher at $1,743.67, up $40.97 per ounce, or 2.4%.

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I don’t know whether you are in a state that is beginning to get out from under a stay-at-home order or if you are, like us here in Michigan, still very much in the shelter-in-place mode. But one thing I am certain of—you want to get out of the house and do something. Anything!

Gold prices had been building a base of support around $1,700 per ounce for several weeks. Last week, prices began to break out from that base of support (see the following chart). Prices moved up steadily, closing at their weekly high of $1,756.30 per ounce.

The major stock market indexes finished the week with strong gains. The Dow Jones Industrial Average grew 2.6%, the S&P 500 Index rose 3.5%, the NASDAQ Composite rallied 6.0%, and the Russell 2000 small-capitalization index gained ground with a 5.5 % advance. The 10-year Treasury bond yield rose 6 basis points, sending Treasury Bonds generally lower. Last week, spot gold closed higher at $1,702.70, up $2.28 per ounce, or 0.13%.

Last week, gold prices continued to solidify support around $1,700 per ounce, closing the week at $1,713.90 per ounce.

April ETF Deathwatch contains 385 zombie ETFs and ETNs.

The Berkshire Hathaway annual shareholder meeting last year drew over 30,000 people to Nebraska to hear the “Oracle of Omaha,” Warren Buffett. With the pandemic, this year the whole meeting was presented on the internet. Visit Omaha, the city’s tourism bureau, figures that will cost the citizens of that city about $21.3 million in lost compensation and revenues, according to The Wall Street Journal.

Gold prices found support around the $1,700-per-ounce level, closing the week at $1,700.90 per ounce.

Despite a rally on Friday (4/24), the string of back-to-back weeks of gains for the major stock market indexes ended last week. The Dow Jones Industrial Average fell 1.9%, the S&P 500 Index slipped 1.3%, and the NASDAQ Composite gave back just 0.2%. The Russell 2000 small-capitalization index did manage a gain, rising 0.3%. The 10-year Treasury bond yield fell 4 basis points, sending Treasury bonds generally higher. Last week, spot gold was the big winner, closing at $1,729.60, up $46.78 per ounce, or 2.78%.

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Last week, gold prices found support at around $1,670 per ounce, and then rallied back toward the recent high at $1,788.00 per ounce before closing at $1,735 per ounce.

Most of the major stock market indexes finished the week with what has been rare of late—back-to-back weeks of gains. The Dow Jones Industrial Average grew 2.2%, the S&P 500 Index rose 2.9%, and the NASDAQ Composite rallied 6.1%. The Russell 2000 small-capitalization index, the best performer the previous week, lost ground last week, falling 1.4%. The 10-year Treasury bond yield fell 7 basis points, sending Treasury bonds generally higher. Last week, spot gold closed lower at $1,682.80, down just $0.91 per ounce, or 0.05%.

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“She broke what?!” I exclaimed. It was two summers ago, and I was trying to find out what had happened to my mother, who was 96 at the time, from a harried health-care aide who was phoning me while trying to assist a 911 crew moving Mom to the ambulance.

Last week, gold prices challenged the $1,800-per-ounce level, hitting $1,788.00 per ounce before retracing to the $1,700-per-ounce support level.

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March ETF Deathwatch contains 399 zombie ETFs and ETNs.

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The major stock market indexes finished substantially higher last week. The Dow Jones Industrial Average gained 12.7%, the S&P 500 Index rose 12.1%, the NASDAQ Composite rallied 10.6%, and the Russell 2000 small-capitalization index bested all of the other indexes with an 18.5% gain. The 10-year Treasury bond yield rose 12 basis points, sending Treasury bonds generally lower. Last week, spot gold closed higher at $1,683.63, up $62.92 per ounce, or 3.9%.

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When I was a kid, it seemed that Good Friday afternoon was always the same. The spring sunshine of the morning would be transformed into a cloudy afternoon. This Good Friday was no exception. Yet, as I sat looking out from my backyard deck on Friday afternoon, a small patch of blue sky stood out, like a turquoise broach pinned to a cable-knit sweater of multiple shades of gray.

Last week, gold prices hit a seven-year high, breaking through the $1,700-per-ounce level and closing at $1,752.80 per ounce—a gain of more than $100 per ounce (see the following chart).

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​​​​​​​One of my favorite novels is Joseph Heller’s 1961 best seller, “Catch-22.” As a teenager, I found the novel hilarious and surprisingly relevant given my father’s experiences in the U.S. Army Air Corps. He, like the chief protagonist in the novel, flew bomber missions in World War II. He spent three years dealing with the Air Corps’ regulations and bureaucracy, and he loved, as Heller did in the novel, to recount their absurdity.

After falling below the 100-day and 200-day moving average the previous week, gold prices climbed above both averages and continued up through the 20-day moving average last week.