“Investors Need to Protect Their Economic Well-being Now and Be Ahead of the Herd,” She Says
Washington, DC -- (ReleaseWire) -- 09/30/2014 --Looking at the latest research on financial markets, I couldn’t help but have an image in my head of a deer-in-headlights warning for U.S. Investors says Dawn Bennett, CEO of Bennett Group Financial Services in her latest missive to investors.
Approximately 80 percent of U.S. large cap portfolio managers, since September 2013, or the last 12 months, through September 2014, not only have underperformed the S&P 500, but are actually negative, she points out. The Dow and the S&P 500 indices, which are U.S. large cap indices, keep hitting new highs, but approximately 80 percent of U.S. large cap portfolio managers, don’t.
Here is a list of big high-profile U.S. companies and their performances year-to-date for 2014. They're large cap and medium cap, and they're down in a range from negative -19 percent to as much as negative 40 to 50 percent, year-to-date. Yet the S&P and the Dow continue to go up!
For example: Amazon is down approximately -19 percent; AutoNation is down approximately - 19 percent. Apollo Education Group down approximately - 21 percent; Genworth Financial is down approximately negative -28 percent, yet the Dow keeps rising.
General Motors down approximately -19 percent; Federal Mogul Holdings Corporation down approximately -20 percent; BHP Billeton Ltd., Limited Partnership,also down approximately -18 percent; Applied Micro Circuits is down approximately -49 percent; Quantum Group down approximately -25 percent; Wynnstay Group down approximately - 26 percent; MGM Resorts, and this represents the status of gambling in the U.S. down approximately -16 percent; Las Vegas Sands is down negative approximately -27 percent. And the Dow keeps rising.
McDonald's is down approximately -10 percent; Priceline is down approximately -14 percent; TripAdvisor is down approximately -10 percent; Chesapeake Energy down approximately-19 percent; Herbalife is down approximately - 44 percent; Nuance Communication is down approximately -34 percent. But the Dow and the S&P500 keep going up.
McDermott International down 10 percent; General Electric is down 7 percent; Toll Brothers is down 16 percent; Standard Pacific Corporation is down 17 percent. Where are the positive numbers? What stocks are running this Dow up?
It's obvious the U.S. stock market is breaking down from the inside out, stock by stock. Stocks are self-destructing within the indices so why then are the S&P 500 and the Dow indices hitting new highs?
There's only one answer, it's through the efforts of our Federal Reserve, and their use of derivatives, algorithmic trading, and also through high-frequency trading. Those two indices are separated completely from the reality of what's not only going on in investor portfolios, but going on with the portfolio managers in the United States. Eighty percent of them are negative.
It means that we're at the top of a speculative market. For the last five years, the Dow and the S&P 500 have been a decoy to suck investors in while the stocks inside the indices erode.
It isn't just the Dow and the S&P 500 that's been dissolving stock-by-stock. It's also NASDAQ. A Bloomberg report showed that within the NASDAQ "47 percent of the stocks in the NASDAQ Composite Index are down at least 20 percent from their peak in the last 12 months, while more than 40 percent have fallen that much in the Russell 2000 Index."
It is apparent that we are now transitioning from “risk-on” to “risk-off”. “Risk-on” is what we have had in the marketplace the last few years. Speculative bets enabled by central banks by the quantitative easing programs.
Investors that went along with the Fed speculation and leveraged bets should start exiting and booking gains, because this unwinding of speculative excesses is exactly the opposite of what the stocks are doing for the last 12 months.
So let me just say this. Buckle up. Big trouble is brewing, and it will be a pretty rough ride for all investors, especially those who aren't prepared. Investors should not suffer from a deer-in-headlights syndrome, frozen, just staring at the Dow and S&P 500 indices as if it were nirvana. Investors need to protect their economic well-being now and be ahead of the herd.
All market data references are sourced to Bloomberg terminal database.
Bennett Group Financial Services LLC, based in Washington, D.C., is a comprehensive financial services firm committed to providing opportunities to clients’ as they seek long-term financial success. Its customized programs are designed with the potential to help grow, lower overall risk and conserve client assets by delivering a high level of personalized service and skill.
For more information, call 866-286-2268 or visit http://www.bennettgroupfinancial.com
Securities offered through Western International Securities Inc. (WIS), member FINRA/SIPC. BGFS and WIS are separate and unaffiliated entities.
About Dawn Bennett
Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program on called Financial Myth Busting http://www.financialmythbusting.com
She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included Rock Legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN as well as take podcasts on the road and forums for interaction.
The show is a great complement to Dawn’s monthly investing seminars that take place at Tysons Corner in McLean, VA, where she discusses in vesting.
She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett or firstname.lastname@example.org