While our once vibrant economy has been quarantined for state-mandated experiments, earnings outlook is beginning to stabilize for a path to recovery. It isn’t pretty.
Earnings growth set a new millennium record in 2018. It’s now a major hurdle to growth in 2019. Growth estimates are a third of last year’s and declining. The mortar in the market’s wall of worry now is margins.
The New Year’s Eve tradition of “dropping the ball” to usher in the new year seems especially appropriate to close out 2018. The stock market had a tumultuous ride in 2018 and “dropped the ball” at year end!
Margins drove outstanding earnings growth in 2018, and can choke it off in 2019. It may seem as if this correction is a bit overdone. But there is a major issue. Margins are at record highs and forecast to recede.
Earnings continue their record-breaking trend. S&P 500 price gains have been driven by earnings growth as overall valuation has subsided. Record margin levels contributed half the earnings growth, but may be the main drag in 2019.
Star Trek’s Ferengi are a species whose culture is entirely based on commerce. Business is pleasure and money is everything. So how would a Ferengi invest in Earth’s stock market? What would their Blue Planet Portfolio look like?
We’ve heard that we should rebalance our portfolios. It’s good for us. Kind of like fiber. But why? How? And how often? Here are three popular methods that compliment most investors’ needs.
Stock market’s character has fundamentally shifted. Gains last year came almost entirely from earnings, and at the lowest volatility in three decades. Earnings growth is at a seven-year high. But future growth depends on margins already at nose-bleed levels.
How can you benefit from the time and effort you have put into preparing your taxes? Before you file away your tax return, learn more and seize the opportunity to plan ahead!
While no investor who’s long the market enjoys a correction, negotiated properly, it can be turned to an advantage. At Coherent, we focus on proactively mitigating downside risks by actively managing our stock market exposure.