Your First Half Market Scorecard

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

I’m about to start celebrating one of my favorite holidays. But before we dig into the subject of the day, I’d like to wish you and yours a very happy Fourth of July.

With all of the global unrest, terror threats, economic uncertainties, etc., we have to deal with, it’s important to remember just how lucky we are to be living right now, in the safest, richest and still the freest country ever created.

This week, I thought we’d take a look back at the first half of the year, as it has been one marked by a lot of big price swings, a lot of buying in safe-haven assets, and a lot of buying in stocks.

Check out the list here of some of the markets I monitor each day. Here you’ll find the performance data for each respective index, year to date through June 30.

  • S&P 500         2.69%
  • Dow                2.90%
  • Nasdaq           -3.29%
  • Nasdaq 100    -3.86%
  • Gold                24.65%
  • Silver              35.44%
  • Treasuries      15.19%

Although there was a decent move higher in large-cap domestic stocks, tech and large-cap tech struggled through the first half of the year. And while stocks generally experienced a back-and-forth first half, it was a different story entirely with safe-haven assets such as gold, silver and long-term U.S. Treasury bonds.

WETF1

Gold and silver have shined so far in 2016, easily outpacing equities. More significantly, Treasury bonds also outpaced stocks by a wide margin.

WETF2

It is this boost in Treasury bond prices, one that has pushed bond yields down to record lows on the 10-year Treasury note, that has me feeling more than a bit uncomfortable.

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WETF3

The reason why is because bond yields should not be falling so low when stock prices also are pushing up toward all-time highs. At some point, something has to give. If history is any harbinger of things to come, the bond market will win out over stocks.

In a year that’s been fraught with some big bouts of selling, as well as some big buying, we now are at a place where we expect more volatility to continue.

Election uncertainty, Brexit outcome uncertainty, Fed uncertainty and the like all will help determine what’s next for markets.

And while we can’t be certain of what’s going to happen, we can be reasonably sure that the markets are going to throw us at least a few curveballs along the way.

The only thing we can do, as investors, is to stay in the batter’s box and keep our eyes on the ball.

 

On Ambition and Patriots

“The same ambition can destroy or save, and make a patriot as it makes a knave.”

— Alexander Pope

The ambition for freedom, liberty and sovereignty is what fueled the birth of our nation. Yet ambition to achieve a goal can sometimes be toxic, especially if the ends are not sound. Whatever you focus your ambition on, make sure it’s a goal worthy of your life’s blood — because in the end, we are all just what we’ve done.

Wisdom about money, investing and life can be found anywhere. If you have a good quote you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my audio podcast, newsletters, seminars or anything else. Ask Doug.

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In case you missed it, I encourage you to read my column from last week about the significance and ramifications of Brexit. I also invite you to comment about my column in the space provided below my commentary.

Finally, I invite you to join me at The MoneyShow San Francisco, Aug. 23-25, Marriott Marquis. Register free by calling 1-800-970-4355 or sign up at DougFabian.SanFranciscoMoneyShow.com. Use priority code 041201.

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Starting this week, we begin a new series about exchange-traded funds that will focus on income-driven dividend funds. Today’s featured ETF is O'Shares FTSE US Quality Dividend ETF (OUSA), a U.S. fund with total net assets of $209.98 million. Income-driven dividend funds typically focus on tracking companies that are regular dividend payers, based on certain criteria that vary from fund to fund. OUSA specifically gives investors access to large- and mid-cap U.S. issuers, wh

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