Economic and Investment News Bits
- “I think QE1 was necessary, but with QE2 the benefits were starting to get questionable, and eventually we got to the point where the costs of QE were going up, and the benefits were going down. One of the negative effects of the later rounds of QE was on confidence. I was wondering when we were going to stop treating the patient like it was still in the trauma room. Not having been a big believer that QE was the only reason the stock market did well, I personally think QE’s demise is a good thing,” (Source: Liz Ann Sonders).
- Regarding current oil prices and the impact on oil companies, the American Petroleum Institute notes “the break-even level for 98% of U.S. crude production is a price below $80 a barrel, and we are not at that point. And 82% of domestic oil production has a break-even price below $60.”
- “A further strengthening of the U.S. dollar will pose problems for businesses that generate revenue abroad. If U.S. goods become more expensive for the foreign consumer, demand will drop, which could impact U.S. jobs,” (Source: U.S. News & World Report).
- “With reform-minded governments in place in China, India, Korea and Japan, there is now a renewed sense of optimism that recent policy announcements will be supportive of businesses in the region. And with China’s growing e-commerce sector continuing to make headlines, U.S. investors have increasingly looked at the developments in the Asian internet sector,” (Source: Matthews Asia).
- “We continue to believe the Fed is likely to maintain a very accommodative overall monetary stance well into next year as the domestic economy is lacking signs of robust growth, which inflation expectations have again turned lower,” (Source: Diamond Hill Capital Management).
- In a survey of Midwest cities, excluding Chicago, Columbus was among the top group of six labeled Successful Cities, those with significantly above-average population growth. It was the only Ohio city included in this group. Cincinnati landed in the middle group, labeled Stable Cities. Akron, Dayton, Toledo, Cleveland, and Youngstown joined Detroit in the Struggling Cities group.
Thought for the week
“Act as if what you do makes a difference. It does.”
William James, American philosopher (1842-1910)
Thought for the Week
“Today’s broadcast media is full of people unrelenting in their effort to convince us that we live in a very scary world. Some point to the macroeconomic backdrop, others focus on geopolitical situations. We could spend hours debating the validity of their fears, but frankly – for us – it would be nothing more than interesting dinner party fodder. It’s not that we don’t acknowledge their fears. To the contrary, we believe concerns of this nature have always been, and will always be, part of investing, especially in international markets.” This excerpt from a recent quarterly commentary from Copeland Capital is certainly similar to the comments readers have witnessed from PDS Planning over the years. One of the tenets of our investing philosophy has been that the importance of dividends is often under-rated, if not ignored by the media. It may not be exciting, and often times it is rather boring. But history is on the side of this concept as a lower-risk way to achieve investing goals, whether the news is scary or not.
Graph of the Week
With the mid-term elections taking place tomorrow, we look at how the S&P 500 has reacted in the past. The average 12 month return following a mid-term election has been just over 16% since 1950. Who knows what the next year will bring, but history would suggest that it’s at least a positive return. (Source: Strategas)
This material is distributed by PDS Planning, Inc. and is for information purposes only. Although information has been obtained from and is based upon sources PDS Planning believes to be reliable, we do not guarantee its accuracy. It is provided with the understanding that no fiduciary relationship exists because of this report. Opinions expressed in this report are not necessarily the opinions of PDS Planning and are subject to change without notice. PDS Planning assumes no liability for the interpretation or use of this report. Investment conclusions and strategies suggested in this report may not be suitable for all investors and consultation with a qualified investment advisor is recommended prior to executing any investment strategy. All rights reserved.