Streetwise for Friday, December 21, 2018

Many have written to me recently but have not received a reply. I recently had major back surgery with severe restrictions on time in front of a computer terminal. However, as they say, I will be back in the saddle next week.

Meanwhile, I have not heard such whining and complaining among those in the investment world, amateurs and professionals alike, who should know better. The only thing missing is a “rending of their clothing.” We are approaching mass hysteria.

Tom Hanks reprimand from “A League of Their Own” – “There’s no crying in baseball!” could easily be transformed to “There’s no crying on Wall Street!”

Once, long ago, I voiced, although whined might be more appropriate, my displeasure at equity investments not adhering to my bidding. The rebuke from dear old Dad was swift and long lasting. “If volatility in the markets or a particular stock is upsetting to you, it’s time to consider another career.”

No, the sky is not falling, although one client put it well when he wrote that if the sky is falling, buy me sky.

Now, do not spill your eggnog but Wall Street is an essential ingredient for your financial security. Additionally, there is no “good time,” or “bad time,” to invest. It is the methodology with which you allocate your investment resources and the quality of what you invest in that determines your level of investment success.

Let me remind you that I have never in my 50 years on Wall Street advocated buying the market, i.e., exchange traded funds or ETFs. Check the performance of companies such as Procter & Gamble, Microsoft and Church & Dwight (totally uncorrelated). In addition, a portfolio designed around one of rising dividends would likely have produced a 2.5 percent return just in dividends.  

With a bit of work, anyone can effectively establish and maintain a profitable portfolio. And you can do it without the myriad of newsletters, books, charts and the seemingly endless series of free meal seminars that are so often hawked. To say you cannot; that is only an excuse, not a reason.

Do I believe that there are sunnier times ahead for the stock market? Absolutely. Ask yourself, where will the markets be a year or two from now? if I were forced to make a prediction as we head into the New Year, I would go with the S&P 500 index well on its way to 2,850. My 2019 growth number for GDP is 2.6 percent.

Yet, there is another side to investing. As you sit back, eggnog in hand, take a moment to ask yourself this question…have you have ever helped a child, a teenager, or maybe even an adult learn some investment fundamentals? It is never too early or too late to introduce someone to the benefits of investing.

I mention this idea every year because the discipline of investing will, of necessity, play a key role in determining a person’s future well-being.

For example, you cannot do better for a young child than with a gift of a few shares of stock. For small children, you might want to consider Disney (DIS), as it is a company they will likely understand. Unfortunately, Disney no longer issues actual share certificates.

For teenage family members who crave a more exciting life, there are companies such as Apple and Microsoft that will likely raise their level of investment enthusiasm. 

If video games are more to the liking of your young guru, then companies such as Electronic Arts (EA) and Take-Two Interactive Software (TTWO) are candidates. Remember, let your budding analyst select the investments, not you.

Note to Readers – Save the Date: I will be teaching Advanced Investment Analysis, starting Monday, January 14, for the Ringling’s Osher Lifelong Learning Institute. Call 941-309-5111 for registration and information.

My 9th annual talk sponsored by the non-profit American Association of Individual Investors (AAII), titled: “Tactics for Tough Times – Deciphering Wall Street in 2019”, will be on Thursday, January 24, at the Hyatt Regency, 1000 Blvd. of the Arts. Registration/Social/Refreshments 3:30 P.M., Program 4:00 to 5:30, Q&A 5:30. Please call 941-706-3449 to register. $15 per person at the door.

Lauren Rudd is a financial writer and columnist. You can write to him at Phone calls accepted between 9 AM and 3 PM at (941) 706-3449. For back columns please go to