Oh the things one sees on TV. Every Sunday morning some loudmouth is screaming at us about the upcoming slate of NFL games. “Call now and I’ll give you my lock of the week – absolutely free!” It’s inevitably a flip of the coin. If it doesn’t hit you never call again. If it hits you think these folks have some magic touch and you fork over $100/month so you can get wonderful tidbits like the Cowboys have never lost on the third Sunday of October when the temperature at kickoff was above 50 degrees. Hogwash!
The investment loudmouths aren’t much different than these NFL/gambling shysters. They’re just as likely to rely on seemingly interesting information to promote and support some absurd theory of where the markets are headed.
If you’re one to tune out the loudmouths read no further. If you’re salivating over the next hot tip and fighting the urge to click buy-buy-buy on your brokerage’s website then these are for you:
Stocks Yield More Than Bonds: Since 1953 the yield on the 10 yr Treasury note has exceeded that of the S&P 500 twenty times on a quarter-end basis. In the 12 months that followed the S&P 500 was up over 80% of the time and by an average 20%.
Volatility: The S&P 500 closed down 7.2% for the week ending 8/5/11. Since 1950 a weekly 5% decline has occurred 39 other times. In the 12 months that followed the S&P 500 was up over 77% of the time and by a median 18.5%.
Consumer Confidence: The University of Michigan’s Consumer Confidence Index dropped in August to 54.9 from its July level of 63.7. This marked the worst reading since 1980. In the 12 months that followed the last ten times the survey fell below 60 the S&P 500 was up 80% of the time and by a median of 20.7%.
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