Stock Option Investment Advice

A 2018 Market Forecast

From the Desk of Ernie Zerenner:  A 2018 Market Forecast At the start of a new year, it is time to reflect on last year and changes to be made in the next year. This is the time of year to make New Year’s resolutions, consider changes to your will or beneficiaries, and investment portfolios. The new year brings the opportunity to make 365 changes and 260 change opportunities to your portfolio. This weekend I tackled the last one, possible investment portfolio changes. These changes were based on several basic assumptions: Our concern is that the market may be over bought as mentioned in our last Blog article ‘Some Market Parameters to Consider Heading into 2018‘. Historically we are overdue for a 10% level correction in stock prices. With the influx of more money going into the economy from tax reform, repatriation of foreign earnings, and infrastructure rebuilding, there will…

Stock Option Investment Advice

Some Market Parameters to Consider Heading into 2018

It is year-end, and time to reflect on this year’s market activity. It certainly has been a strong up trending year for equities. And with all the very positive news currently, there is room for more gains in 2018. However, markets do not just go up forever. The markets are extended without a normal set back of 10% in some time. Is it time to be cautious? While at the library this weekend, I looked through the Value Line Survey. They had a table of some key market and economic parameters for the present vs. historical highs and lows. Some that caught my attention are listed below: Parameter                Current              Last Top            Last Low PE on VL stocks        20.3                    19.6                   14.3 Dividend Yield VL      1.9                       2.0                     4.0 Prime Rate                4.5                       4.3                     3.3 AAA Corp. Bonds      3.5                       3.5                     5.5 Short Interest/Vol      16.8                     17.9                    8.6 As you can see most of the…