Sheaff Brock | Economic indicators looking up | thumbs up

Following the Lead—Economic Indicators Point Upwards

The economy, like the scenery on a car trip, can be viewed through the windshield, the rearview mirror, or the side window, Investopedia explains. Leading indicators are pieces of data which economists see as they look through “the windshield” at the economy, using those indicators to help predict the future direction of the markets. Examples of economic indicators include: current stock prices stock futures bond and mortgage interest rates the yield curve foreign exchange rates commodity prices (gold, grains, oil, [...]

Sheaff Brock | Market Volatility in End-of-Day Trading Volume

At the End of the Day, Market Volatility Happens at the End of the Day

Bet you didn’t know this startling statistic—26% of all stock market trades are done at the very end of the trading day! How does that relate to the market volatility fear reaction that many investors are experiencing these days? Take a closer look. In just the first quarter of 2018, there have been four times as many days with a greater than 1% price move as there were in all of 2017. When weaker job statistics, political scandals, and scuttlebutt [...]

Sheaff Brock | Market Volatility's Fear Factor with Boy Hiding in Bed

To Measure Market Volatility, You Oughta Meet VIX

Meet VIX, the ticker symbol for the Chicago Board Options Exchange’s Volatility Index. The VIX, constructed using a wide range of Standard & Poor’s 500 Index options, is a way to express the market’s expectations of volatility over the coming 30 days. What is actually measured by the VIX is the ratio of put options versus call options being bought on the S&P 500. By way of background, the CBOE Volatility Index, originally developed back in 1986, was designed to [...]

Sheaff Brock | Stock Market Volatility as a Sheep in Wolf's Clothing

Market Volatility—A Sheep in Wolf’s Clothing?

“The market is as much about sentiment and psychology as it is earnings and profits,” Avi Salzman stated in Barron’s. As Salzman observed the “tit-for-tat proposals” of tariffs between China and the U.S., he realized that the fear factor was going up regarding a potential trade war. Meanwhile, stocks were also being rattled by an anemic jobs report. Salzman is reminded, he says, of “the importance of perception versus what is reality.” No tariffs have actually been approved or [...]

A couple holding hands | stock market positive feedback may lead to lasting relationships | Sheaff Brock

Stock Market’s Ratio of Positive to Negative Feedback has been Spectacular

In improving team performance through feedback, corporate consultants Jack Zenger and Joseph Folkman report in the Harvard Business Review, the ideal praise-to-criticism ratio is 5:1. Negative feedback grabs attention, they concede, and has the power to change behavior, but it does not make people put forth their best efforts. Only positive feedback truly motivates vigor, determination, and creativity. In his book “What Predicts Divorce,” John Mordechai Gottman finds essentially the same thing in marriage—the single biggest determinant of wedded [...]

dice showing buy, sell, or panic | investor classes market volatility | Sheaff Brock

The 3 Classes of Investors; Only 1 Can Afford to Avoid the Game

The head of behavioral science at Morningstar, Dr. Stephen Wendel, describes investors in simple terms: There are those wealthy enough to meet all their financial goals with cash and then there’s everybody else. Members of the first class need not bother themselves with market volatility; the other two classifications of investors face an unavoidable trade-off, Wendel explains. Type #2 stay in the market, running the risk of failing to generate sufficient returns to meet their financial goals. Type #3 derail [...]

stock market drop and market correction | Sheaff Brock

Just How “Unprecedented” is This Drop? Just How Scared Should I Be?

“Dow plunges 1,033 points and sinks into correction,” the money.cnn.com headline practically jumped off your computer screen February 8th. Now what? you wonder. Yes, the pundits have been saying for some time now that a correction was overdue, that we investors have been waxing complacent, and that what goes up must eventually come down. Is this the beginning of The End? Whoa….When it comes to stock market corrections, the word “unprecedented” is simply incorrect when it comes to describing the [...]

Sheaff Brock | Index Income Overlay | covered calls | net unrealized appreciation | financial planning

Planning Conversation Can Net Unrealized Appreciation Benefit

It’s right there in Section 402 (e)(4)(B) of the IRS publication—that part about net unrealized appreciation. Without having in-depth planning conversations with their advisors, clients might miss out on important tax benefits. In an interview with our SheaffBriefs editor, Sheaff Brock Senior Vice President of Investments Christy Jordan pointed to the following statement in the IRS Code: Section 402(e)(4)( B) provides that in the case of a lump sum distribution which includes employer securities, there shall be excluded from gross income the net [...]

active management of individual stocks | Sheaff Brock

What Do Active Managers Do (That Index Funds Don’t)?

There are many people espousing the use of index funds, ETFs or other passive products, instead of using a firm like ours that provides active management of individual stocks (or like our sister company, Salzinger Sheaff Brock, that uses active management with a portfolio of ETFs and mutual funds), Sheaff Brock Managing Director Dave Gilreath reflected in an interview with our SheaffBriefs editor … It’s an old, old debate about which way to manage investments is better—you know, the active [...]

Young Bull | Sheaff Brock | bull stock market

This Bull May be Younger than You Think!

For investors worried that the stock market is so high that it has to be headed for a drop, Sheaff Brock Director Jim Murphy wants them to know he’s not having any of it. “At Sheaff Brock, we believe this is a ‘market of stocks,’ not a ‘stock market,’” he explains. Translation: The big upward price movement in the Dow has been primarily driven by its most expensive stocks, specifically the FANG (Facebook, Apple, Netflix, Google) and Microsoft. There are [...]