Daily Market Sector Advice
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The Stock Market in 2020…
Where Will It Go From Here?
Q4 – 2019
SectorStories is an emerging free public service, founded to share the key stories driving short-term and longer-term stock market movements within the primary economic sectors. Our goal is focused on empowering the average small investor with insight to make informed choices. SectorStories will soon be offered as an added feature of Uvida's upcoming Business Membership and supported by carefully screened reputable advertising messages.
Setting aside the almost daily roller-coaster, induced by the 'Trump Factor', it's no secret that the 10-year-long net effect of abnormally low interest rates and the full repeal of Glass-Steagall twenty years ago have had a profound effect on overall stock market participation.
- Your money is in the stock market instead of a bank CD. CD rates have plummeted over the past 20 years.
- Corporate stock buybacks (with super cheap borrowed money) are at record-breaking levels, with corporate debt now more than $10 trillion for public companies (and another $5.5 trillion for private and small business). Read this recent Forbes article. With the new corporate tax breaks in place, many CEOs are considering even more stock buybacks instead of the intended business expansion and hiring new workers.
- Local community banks struggle more than ever to compete with the mega-banks (who now also own a huge slice of public stocks). One in four local banks has vanished since 2008, due in part to the costly regulations imposed by Dodd-Frank.
- We'll leave two sleeping giants – climate change and geo-politics – out of the discussion for the moment, but they're lurking just around the next blind corner.
- On March 16, 2017, the Treasury began to consider extraordinary measures to stay under the government's $20 trillion borrowing limit until Congress can extend it. While such extensions used to be routine, they have taken on a political life of their own in a sharply partisan Washington, D.C. It may be hoping too much to think that any future extensions, under Trump or any future president, will go smoothly.
Today's Insanely High Average P/E Ratio
As we march into 2020, the Shiller P/E Ratio for the S&P 500 has been floating recently between 28 and 34… the second highest point in history! That's more than double the stock market's average Price/Earnings Ratio over the past 100 years. On October 1, 1929, a month before the infamous crash, it stood at 28.94. Learn more…
The Power of Long & Short ETFs
ETFs (Exchange Traded Funds) are an efficient way to invest in both broad market indices (Dow, S&P, NASDAQ, Russell) AND individual sectors. ETFs combine the best features of index mutual funds with the trading flexibility of individual securities. ETFs provide excellent diversification benefits, with low expenses relative to other investing strategies.
You can gain nearly complete market exposure with just a handful of ETFs, without the risk inherent in individual stock picks, yet still manage your portfolio actively by moving in and out of ETFs as both long and short conditions dictate. SectorStories will continually analyze market sectors and provide you with alerts when it may be time to trade. This is NOT a day-trading service. SectorStories is designed to maximize returns with minimal downside risk by signaling no more than 25-30 trades per year, seeking an average 3%-5% gain per trade.