The market doesn’t have enough to worry about… close the NYSE for more than three-hours and watch what happens. The best part of it is the media which has to take the tact of an elephant in a china closet. On MarketWatch a columnist I thought was above such headlines, “Why the NYSE trading halt should alarm investors”, ran proudly. In a world of click mania the media fear tactics will not help and in this case may only add fuel to the worry fire that is already burning bright. The subtitle of, “it brings up the question: what would a cyber attack look like?” is even better. I can cry in my soup or I can move forward. I chose to move forward.
It is hard to get a pulse for the market with the issues surrounding trading today and for that reason I will only look at what we know or think currently. The first on my list is now China. Down more than 7% overnight and with the issues in New York today, you have to question how much further will the Chinese market fall. FXI is down more than 26% since April and some indexes are down nearly 50% in China. This has the sound of the 2008 markets in the US. The blame is going to the government intervening as the cause of the mass selling. Sounds similar to the 2000 crash when Greenspan and company decided to point fingers at valuation on technology stocks. Whatever it takes… there is always someone or something to blame. Watching how the country trades tonight… if the free-fall continues it could have more ramifications globally than we want to admit.
Treasury bonds continue to ride the coattails of anxiety. TLT has climbed nearly 5% the last week. As you would expect money rotates to where it feels safest when the fear/worries step in. Will it hold? Will it climb higher? That all depends on the fear level of investors. The VIX index today has challenged the current highs at 19.8. A move towards the December highs at 25 will rattle the markets enough to push more money into the bonds. The ten-year bond has dropped the yield to 2.2% or down 27 basis points the last week. Rally on at least for now.
The Fed minutes released at 2 pm today were lost in the other headlines, but they did not have much in them relative to help or insight with the Fed and the proposed hikes in the works prior to year end. Remember we are looking for a proposed date for the hikes while the Fed is playing a game of dungeons and dragons, or my favorite CLUE. They are looking for confirmation that the economic growth was sufficiently strong and the labor markets were firm. That is subject to interpretation by who you ask. From my perspective no help in any timeline for the hikes on the Fed funds rate. If this remains a mystery it will only help the bonds continue to rally.
Crude remains a mixed bag on the world chatter and supply data. The $51.67 level on the close is the next support level and I am watching how this unfolds with interest. A continued move lower for crude would show the lack of balance shifting back to the too much supply side and the sellers will hold the momentum. Still no interested in the trade until something other than speculation is the driver.
With the launch of the robo-adviser platforms this year I have noticed a pickup in articles on bashing advisers, brokers, insurance agents or any other financial consulting type person. The interesting part for me is the IQ level of the material being written in the media. Finding or hiring a qualified adviser is subject to interpretation of what you deem to be qualified. Thus, why the IQ level of these articles is simplistic in nature and deemed to be more of a buyer beware format. I am not for or against robo-advisers, I am not for or against financial advisers. What I am for is consumer education. We all know that book smarts don’t make good doctors experience does. The same is true with money experience makes you a good investor. Learn how to invest before you invest or give your money to some else to invest. My favorite quote is from Will Rogers on this subject… “I am more interested in the return of my principle, than I am the return on my principle.” At some point we need to understand it is not about knowing the person or the credentials they have to invest my money… but, understanding the products and investments they are putting my money into. Know where your money is, not who invested it. If you are going to invest your own money… what do you look at the person investing it or where it is being invested? Learn about investments, not advisers. If your adviser has a strategy understand the strategy… if you don’t understand the product or strategy keep it simple, don’t invest. Buy what you understand and you will be light years ahead of the authors of the article, the financial adviser and anyone else pushing opinions. Thus, my comment I am for an educated consumer… if all you have to the time to understand is a Certificate of Deposit at the bank, put your money there… at least you will sleep at night and know that your principle will be there when ask for it back. Bottom line… It is YOUR money, manage it!