Two years can feel like an eternity to maintain a defensive portfolio when it seems like every other investor around you is minting money in the most speculative sectors of the stock market. But patience is a vital partner in your quest for long-term investment success. During the five trading days ending on August 25, the Dow plunged over 10.5%–wiping out nearly two years of stock market gains. Defensive investors fared much better.
Over the last 70 years, there have only been seven other occasions when stocks fell by as much as they did, as fast as they did in August. Why was the correction so fast? In this month's issue, we'll take a look as some of the causes of the correction and what the prospects for the market are going forward.
We'll also tell you about the best places to deploy fresh cash to take advantage of the volatility and some potential future opportunities that have moved onto our radar screen for the first time in almost a decade. More >>
At Young Research, patience has always been at the heart of our investment strategy, but on Wall Street, patience is in short supply. In investing, patience means passing on marginal opportunities in speculative markets and waiting for the truly compelling opportunities to arise. It means having the willingness to wait years for an investment to work out in your favor. It means being willing to underperform major market averages in certain environments. And when it comes to common stocks, investing with patience means giving your portfolio companies time to breathe, time to correct temporary problems, and time to work through industry down cycles.
When you invest in stocks that are out of favor, patience is your number-one ally. Your number-two ally is knowledge of the sentiment cycle, or the range of different emotions that investors go through as stocks go from loved to hated. In this month's letter, I take an in-depth look at out-of-favor opportunities found in our Equities Master List. In particular, I examine where we are today in the sentiment cycle for commodities, including energy, precious metals, and coal. Speaking of coal, this month I'm recommending that you add to your position in one of our coal holdings. This low-cost producer has one of the strongest balance sheets in the industry, and in the event of a recovery in coal, you can expect its shares to trade at a significant premium to your average cost. More >>
October 09, 2015 The S&P capped its biggest 8-day percentage gain in almost four years yesterday--rising more than 7%. The catalyst for yesterday's gains was the minutes of the latest Federal Reserve meeting. Investors decided the meeting minutes were dovish (they weren't, they were neutral at best) and bid up shares in a fast and furious late day […] More »
The Young Research Commodities chart book includes price, both real and nominal, for different time periods and annual rates of change for the commodities covered on the Global Investment Scorecard.
The Young Research Equities chart book includes a range of charts featuring indicators on stock market valuation, sentiment, relative strength, etc. for U.S. stocks over a variety of timescales.
The Young Research U.S. Economy chart book includes short and long-term charts on output and activity, the labor market, inflation, and consumer and business sentiment.
Since 1896, the average bull market has lasted 835 days and resulted in a doubling of stock prices. For more historical perspective on the duration and magnitude of bull and bear markets, check out our new Dow Bull and Bear Markets table.
Our Credit Markets chart book includes many of the charts we monitor and use regularly to formulate fixed-income investment strategy. The chart book includes long-term charts on nominal and inflation-adjusted treasury rates, policy rates, interest rate valuation indicators, and credit spreads.
Jeremy Jones, CFA, is the director of research for Young Research & Publishing and editor of the Global Investment Strategy newsletter. Jeremy is also the Chief Investment Officer at Richard C. Young & Co., Ltd., an investment advisor to high net-worth families and businesses. More »