Alli Jordan’s Post

In their latest blog post, Aptus Capital Advisors has some thoughts (and charts) on international stocks: 🏛️ US stocks might not be as expensive as many perceive them to be. 🌐 How should you think about investing internationally vs domestically? 📈 Owning international equities helps maximize risk-adjusted returns. Check out these insights and more. https://lnkd.in/eeVSCX4N

After 15 years of mediocre performance, many U.S. investors are swearing off foreign stocks. Planning to invest solely in U.S. shares? Before you do, here are six questions to ask yourself.

THE DANGERS OF THIS HISTORIC VALUTION EXTREME All bull markets are led by a minority of stocks that are typically associated with an emerging technology or other investment theme, and the current bull market is no exception. The current bull market has been led by the “Magnificent 7” group of stocks largely for their association with Artificial Intelligence. They are the successors of the “FAANG” group which drove the previous bull market which ended in late 2021. The two groups have considerable overlap. The dominance of the “Magnificent 7” has reached unprecedented levels for their contribution to the total returns of the S&P 500, their index weighting (about 30%) and their enormous market capitalization. Indeed, their total market capitalization is greater than any non-U.S. stock market! While these are important businesses that should command substantial valuations, it seems excessive that they should be judged more valuable than the collective value of the listed companies of entire nations. Markets, perhaps of investor psychology, tend to move to extremes of bullish and bearish sentiment, which typically provides the most attractive risk/reward opportunities for investors. We feel that we are at such an extreme now and that investors should be attentive for signs of a change in trend. The very large market weighting of the “Magnificent 7” and their premium valuations suggest that they could produce a substantial decline in a downturn. Highly concentrated market leadership is prone to volatility, which is what we expect to occur in the second half of 2024. Volatility will produce risks but also great opportunities for profit for prepared investors. Each month in the Global Investment Letter I update my investing activities, as well as comment on major global equity, fixed income, currency, and commodity markets.    If you found this post of interest, you’ll find the Global Investment Letter of value. To view free sample issues of our paid service and to receive our free weekly investment comment (exclusive to those who signup) please visit: https://lnkd.in/gJEVvFtv

THE “MAGNIFICENT 7” GROUP IS WORTH MORE THAN ANY NON-U.S. MARKET All bull markets are led by a minority of stocks that are typically associated with an emerging technology or other investment theme, and the current bull market is no exception. The current bull market has been led by the “Magnificent 7” group of stocks largely for their association with Artificial Intelligence. They are the successors of the “FAANG” group which drove the previous bull market which ended in late 2021. The two groups have considerable overlap. The dominance of the “Magnificent 7” has reached unprecedented levels for their contribution to the total returns of the S&P 500, their index weighting (about 30%) and their enormous market capitalization. Indeed, their total market capitalization is greater than any non-U.S. stock market! While these are important businesses that should command substantial valuations, it seems excessive that they should be judged more valuable than the collective value of the listed companies of entire nations. Markets, perhaps of investor psychology, tend to move to extremes of bullish and bearish sentiment, which typically provides the most attractive risk/reward opportunities for investors. We feel that we are at such an extreme now and that investors should be attentive for signs of a change in trend. The very large market weighting of the “Magnificent 7” and their premium valuations suggest that they could produce a substantial decline in a downturn. Highly concentrated market leadership is prone to volatility, which is what we expect to occur in the second half of 2024. Volatility will produce risks but also great opportunities for profit for prepared investors. Each month in the Global Investment Letter I update my investing activities, as well as comment on major global equity, fixed income, currency, and commodity markets. If you found this post of interest, you’ll find the Global Investment Letter of value. To view free sample issues of our paid service and to receive our free weekly investment comment (exclusive to those who signup) please visit: https://lnkd.in/gJEVvFtv

"You should use index funds for your U.S. stock investments because the market is well-covered and efficient. But you should use active managers for international stocks, where managers can still outperform." I hear something like this every so often. It's one of those things that sounds like it should be true. But the data doesn't back it up. According to Morningstar, over the last 10 years: 😐 13% of U.S. Large Cap Stock managers have beaten passive peers 🫤 25% of Foreign Large Cap Stock managers have beaten passive peers 😕 26% of Emerging Markets Stock managers have beaten passive peers U.S. or foreign, active funds tend to underperform (and cost more, be less tax-efficient, and so on....).

🚀 Navigating the World of Indices: A Beginner’s Guide! 📈 Are you curious about how the stock market operates? Understanding market indices is a fantastic starting point! The Dow Jones Index and its counterparts offer valuable insights into economic health, investor sentiment, and market trends. Here are key highlights to consider: 1️⃣ What is an Index? An index groups together a collection of stocks to provide a snapshot of market performance. The Dow Jones, for instance, tracks 30 major U.S. companies, reflecting their overall health. 2️⃣ Why Indices Matter: - Benchmarking: They serve as benchmarks for portfolio performance. - Investment Opportunities: Understanding them helps you identify sectors that are thriving or lagging. - Market Sentiment: They can signal broader economic trends, allowing investors to make informed decisions. 3️⃣ Popular Indices to Know: - S&P 500: Includes 500 large companies and is seen as a barometer for the U.S. economy. - NASDAQ Composite: Focuses on tech stocks, showcasing innovation-driven sectors. - FTSE 100: Measures the top 100 companies listed on the London Stock Exchange, useful for international investors. 4️⃣ How to Get Started: - Start by following these indices to monitor market performance. - Consider index funds or ETFs for diversified investment that mirrors index performance. Curious about how to dive deeper into the world of trading and investing? By understanding these indices, you can position yourself for smarter investment decisions! 👉 Want to learn more? Read the full guide here: https://lnkd.in/gWVME8zZ Let’s connect and discuss the exciting world of trading! What are your thoughts on using indices in your investment strategy? 💬 #Trading #Investing #StockMarket #Indices #FinancialEducation #WealthManagement #InvestSmart #MarketAnalysis

Buy-the-dip action in play It was a weak day yesterday for the stock market as bond yields, oil prices, and the strength of Hurricane Milton all rose. Things are looking a little better this morning with some Pavlovian buy-the-dip interest coming into play. Currently, the S&P 500 futures are up 20 points and are trading 0.4% above fair value, the Nasdaq 100 futures are up 71 points and are trading 0.4% above fair value, and the Dow Jones Industrial Average futures are up 46 points and are trading 0.1% above fair value. A 1.7% pre-market gain in NVIDIA (NVDA) is helping to boost things. Bloomberg reports that Hon Hai Precision is aiming to increase capacity to meet demand for artificial intelligence products. Gain in other mega-cap stocks are an additional underpinning factor for the equity futures trade, although Microsoft (MSFT) is lagging, trading flat on news of an Oppenheimer downgrade to Perform from Outperform that was tied to concerns about FY25 estimates being too high. A prevailing question today is, will the buy-the-dip inclination succeed (again) or will there be a tonal shift where participants sell into strength? The answer may have a lot to do with market rates. The 10-yr note yield is pushing higher, currently up one basis point to 4.04%, while the 2-yr note yield is down two basis points to 3.98% but up from an overnight low of 3.94%. There will be a $58 billion 3-yr note auction today with results announced at 1:00 p.m. ET. The move in market rates occurred in front of the release of the August Trade Balance Report, which itself was greeted with a muted response. The trade deficit narrowed to $70.4 billion in August (Briefing.com consensus -$71.3 billion) from a downwardly revised $78.9 billion (from -$78.8 billion) in July. The improvement was the result of exports being $5.3 billion more than July exports and imports being $3.2 billion less than July imports. The key takeaway from the report is that the net exports component for August will be a positive input for Q3 GDP forecasts. The update from China's National Development and Reform Commission (NDRC) was not positive for Hong Kong's Hang Seng Index. It plunged 9.4% on Tuesday after the NDRC commented on the implementation of prior stimulus, but did not announce any new stimulus measures. China's Shanghai Composite nonetheless gained another 4.6% on the return from the Golden Week holiday but finished well off its high (+10.1%) for the session. Oil prices are coming down from recent highs. WTI crude futures are off 1.8% to $75.73/bbl and Brent crude futures are off 1.8% to $79.47/bbl. Hurricane Milton's strength has been tempered to Category 4 from yesterday's Category 5 in open water. Milton is anticipated to make landfall on Florida's west-central coast sometime Wednesday evening or Thursday morning.

Lower interest rates can improve the prospects of small-cap stocks in several ways, according to Templeton Global Equity Group. The team reviews investment opportunities in its latest Global Equity Pulse. https://lnkd.in/dTCttTXy

Lower interest rates can improve the prospects of small-cap stocks in several ways, according to Templeton Global Equity Group. The team reviews investment opportunities in its latest Global Equity Pulse.  https://lnkd.in/duePQUYc

Lower interest rates can improve the prospects of small-cap stocks in several ways, according to Templeton Global Equity Group. The team reviews investment opportunities in its latest Global Equity Pulse. https://s.frk.com/3X0kviu