Diamonds and Dogs
Stocks Slide into CloseThe stock market continues to falter as we head into summer. The markets have been down for 5 consecutive weeks and the first two days of this week. The bearish drop has not been dramatic, as the drop from the highs is still about 5%. It feels more like the drip, drip, drip of a Chinese water torture.
Interesting, and telling, fact of the day is that for the past 80 years, 55% of the total return of the stock market has come from dividends. Pure growth plays can add zest to a portfolio and make for great cocktail talk, but over the long hall, reinvesting dividends is where the investment game is won or lost. Finally, the banks and financials cannot get out of their own way. Partly, as Jamie Dimon of JPMorgan alluded to in a call to Fed Chairman Bernanke today, the costs and regulations (in the 1000's) are keeping bank profitability down. Also overlooked is the competitive effect of hedge funds, private equity, and international money players are having on the profits of the large multi-national banks. The big banks are in a squeeze and until the Fed's back off or long-term interest rates shoot up, the pressure for profits will continue
Diamonds and Dogs market commentary is a journal of daily observations on anything that happens to be of interest to our author. Obviously, our primary focus is the stock market and world economic events, but for this page we have no defined topics. We want this page to be dedicated to the interests, concerns, and possibly to the financial gain of our clients and friends. All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.