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A Painful Week Draws to a Close

While I wouldn’t call this week a ‘disaster’–at least in my accounts, there was certainly plenty of pain. I have 3 major brokerage accounts and 2 of them were off 1/4%–but the 3rd has taken about a 1/2% hit. This doesn’t really compare to losses we have seen in the past–of course most of this is due to portfolio composition which has never had such a large weighting to CDs, treasuries etc.

I see that oil prices are up a buck this morning trading right around $93/barrel (WTI). I paid $3.79/gallon yesterday–from a consumer confidence perspective it seems that $4.00 a gallon is about when folks start to really be squeezed (at least the ‘have nots’). Thursday price hit the high $94s per barrel–so maybe we have seen the highs, although I don’t really understand oil price dynamics so who really knows.

So we are 30 minutes from important economic news–personal consumption expenditures (PCE) in particular. While equities are up nicely at the moment and interest rates are down at 4.54% right now we know how quick this can change—30 seconds more or less.

I don’t even have to say it, but I will not be buying or selling anything today- just my gut feel at this moment is that there will be no reason to buy for weeks to come–by then we have new data and maybe it changes my outlook, but right now just watching from the sidelines.

33 thoughts on “A Painful Week Draws to a Close”

  1. For preferred accounts, I’m always confused by the reference to fluctuating account balances or the distraction of the news cycle especially as each relates to interest rates.

    After a bit of a dry spell and I know along with other friends here we added significantly to our holdings of high IG at/near 52-week lows over the last week, ignoring the malestrom of doom in the media. Over the years, our very best buys occur at these times.

    Maybe counter-intuitively, if account balances are dropping, it’s near certain we are buying – which ultimately leads to much higher account balances and higher income.

    Best wishes for a great weekend to all.

    1. alpha: I agree, as long as we do our homework and buy things that shouldn’t go away or quit paying we will prosper. With enough diversification a bad pick here or there should be of little consequence to the overall portfolio.
      Being 30 days away from retirement day I am not as concerned about my account balance as I am of the steady income flow from my account that still grows a little bit even after RMD’s.
      You have a great weekend as well !

    2. Tippie toe, tippie toe as the water is still a bit cold…Hit on one of my local utility preferreds way below its 10 year low on a 5% drop today and another one too. Keeping plenty of money buried in CDs so I dont do too much too fast. As I think we will get better deals later. But since I cant time this all, I have to keep slowly entering. I take comfort in knowing I am buying things about 30% cheaper now than if I had just been a buy and holder back in ZIP era. So no matter what happens going forward at least I have shown some patience, ha.

      1. only way to play it Grid, SGOV is my little 5+% payer that is highly liquid so can jump on something quick if there is some fluff built into some of the asks out there for these long loved illiquids.

        I’m actually a little embarrassed at how much Connecticut Light and Power I have at this point, lol.

        1. Pig, I was totally empty on them for better part of year and more. But past few weeks have been slowly stock piling on mini dumps. Some I have never owned before. … I have thought hard on another one I finally bought yesterday. Dont view it as an investment but as a little bet. I bought 1000 shares of HAWLI at around $9.

          1. Personally I think it’s a good bet. I have the common in the $9’s, just going to see how it plays out. HAWLI dipped below $9 today, that one is on my radar as well. If they pause divvy I can see it dropping to $5, but in the longer run, I see HE surviving this.

      2. Grid, my wife’s account is down about 1% for the year ( at this point ) and has been as high as 2% up during the year.
        But on the other hand she has taken out about 3% in withdrawals. So I consider this good. Still sitting on 1/3rd cash in MM & bond funds and sniping here and there. Took a half position in RWAYZ on Friday at 24.65 8% yield to balance out some of these 6%ers

    3. I ignore the news of the day: Oil prices, change in the Treasury yields, economic reports. I add when the market drops and sell off some when it rises. Or I swap out of issues that appreciate 1-2 dividends in a few days to weeks. And all the while, I pocket dividends. Eventually, rates should drop. One thing that I need to remember is that every time my account value approaches or exceeds the high of the year, a correction is coming. It happens every time. I need to bump up my hedges when I start feeling comfortable. Oh well, maybe next time.

    4. The stock market is the only market where things go on sale and everybody runs for the exits. Raise prices and everybody wants one.

    1. My wife’s on the road and giving me updates 5.47 Vallejo, 5.37 Vacaville, 5.47 Cordilla, 5.67 Santa Rosa gasp!
      That’s Northern California for you.

      1. Charles M: Know the area well, my daughter lives in the east part of Fairfield, the last exit before heading to Vacaville. The price is about the same here on the Central Coast.

        1. Bill, you know it well if when 80 chokes up there to get off on the back roads and take the old 40.

        1. Next time I go up to my sister-in-laws in Hangtown I’ll have to remember that. Normally hit the one in Folsom going up and down the hill.

  2. The PCE this morning was excellent.

    I know people focus on the annual inflation rates. The chart below shows 4.3% if you add up the last 12 months.

    If you look at the last 6 months, the core PCE is 1.4% (annualized that is 2.8%).

    If you look at the last 3 months, the core PCE (annualized this is 2%).

    Unless the trend changes, the Fed should be done raising rates (of course, that is my view of the world).


  3. Nice bounce in TLT this morning – I am thinking the next wave down begins soon but, we’ll see.

  4. Tim

    I have attached an interesting article from Wolfstreet on corporate profits (public and private) since 2000. Interpolating from the graph, the compound growth rate is about 7%. However, from 2019 to the present total profits have increased about 40%. US corporations had a very nice quarantine despite the temporary dip in 2020?


    1. I didn’t know that the Federal Reserve Banks – technically private corporations – are included in the official US corporate profit headline calculations. +1 to Wolfstreet for this tidbit.

  5. It’s a lazy Friday morning so I’ll just ask a question instead of trying to track down the actual answer – When do they announce the terms for the next IBOND? What will be interesting is the amount of fixed rate they will decide to give….. You can estimate the other, but we are in USGovt’s hands for whatever the new fixed rate portion will be.

  6. I feel like its an illusion that things seem like everything is normal. I keep waiting for something to happen.

  7. 0.25% equity hit for the week is not terribly bad compared to other investments. My large account is down 0.24% in 2 weeks and my others combined, down just under 0.1%. I have half of my funds in treasury ladders and the other half sprinkled in preferreds, a JPM bond and some agency bonds (FHLB, FFC, etc.). So, I look at it as the glass half full and not half empty. I am still getting my income and, eventually, that equity portion should come back to par. I am SWANing!

  8. “from a consumer confidence perspective it seems that $4.00 a gallon is about when folks start to really be squeezed”

    Out here in AZ, currently $4.99 in Phx area. Hasn’t seemed to slow anyone down. Roads are as full as ever and restaurants still seem packed (based on parking lots, we don’t eat out a lot)

    1. Yeah, I was gonna say, when it was $4.50 here a while back, it did not seem to impact anyone too much. I have a 72 miles round trip commute so I felt some increase in expenditures but not a lot. I did drive my pick-up less with its 15 mpg!

      1. Along a similar vane, it costs about $20-$25 per meal now to feed my endless stomached hockey playing teenage boy. If we have to stop for fast food on road trips all the places are packed, drive thru lines doubled up, all with eager people willing to shell out for quadruple priced Happy Meals. One has to think these companies now wonder why they didn’t charge this much before the pandemic. I retired at 50 through what I thought was some very smart and astute investing through my working years, but would have never done so if I’d seen what my future food bill would become.

        1. Pig, your a soft dad! Toughen up and make him eat off the $2 sandwich menu. Surely after $10 he will get stuffed on eating rubber McChickens and more bread than burger sandwiches, ha.

      2. yazzer, is “here” the Los Angeles area ?
        Sometimes** Publix Super Markets in the southeast US, for each $50 of goods purchased*** one can buy a $50 gas station card at $40. Buyer chooses gas station brand.

        ** when advertised in weekly Sales Pamphlet and only from Wednesday (or Thursday) to Sunday.
        *** sans alcohol, cigarettes, and perhaps other items

        If I cannot get that 20% discount, then as others have mentioned, Costco or Buc-ee’s seem to have the best gas prices.

        1. Sometimes, Publix offers deals on company rebates – like Conagra which has a diverse product line up. For example, spend $30, get $10. Buy $30 worth of BOGOs (buy one get one free) and it’s equivalent to $60 of food for $20. Submit online and avoid the postage stamp :->) A few times, I’ve done the deal 3x and donated $180+ worth of food to the local food bank.

    2. Regular gas $5.55 a gallon at California Costco this morning, $5.79 at Chevron in the same area.

        1. Use gas buddy. Com to look in your area
          Let’s you spot the deals as long as you feel ok with the station

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