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Here’s what’s driving stocks higher despite mounting economic worries: Kevin O’Leary

johnNjohnN
in Fund Discussions
https://www.cnbc.com/2020/05/16/kevin-oleary-talks-stock-market-etfs-as-economic-worries-mount.html

Here’s what’s driving stocks higher despite mounting economic worries: Kevin O’Leary

This is driving stocks higher despite mounting economic worries: Kevin O’Leary
Unprecedented demand for stocks.

That’s one major piece to the puzzle that is the current relationship between the U.S. stock market and the underlying economy, O’Shares ETFs Chairman and “Shark Tank” investor Kevin O’Leary told CNBC’s “ETF Edge” this week.


Comments

  • Old_Skeet
    edited May 2020
    Here is how Old_Skeet is playing it.

    I have two sleeves of equity income funds (one domestic and one global) which make up better than 15% of my portfolio plus what my hybrid funds hold. With this, I'm thinking that I've got, at least, somewhere around 50% in equity income type stocks within equities. As you may recall, I was a buyer of equity income funds during the recent stock market swoon and increased my allocation to them by 5%. In this way, I felt I'd get paid by collecting dividends during the anticipated stock market recovery over the next year, or so. My domestic equity income sleeve has a current yield of 3.72% while the global one has a yield of 2.53%. While this is short of the yield that my fixed income (4.52%) and hybrid income (3.75%) sleeves generate ... the equity income sleeves, I'm thinking, offer better capital appreciation opportunity. In looking back over the past ten year total returns for each sleeve the equity income sleeves had a total return in the 7% to 8% range while the income sleeves had a ten year total return in 5% to 6% range. And, if I had done nothing and kept the 5% in cash ... which I used to buy equity income ... (the best performing money market fund I have) had a ten year total return of 0.67%.

    With this, I'm thinking it pays to buy the stock market pullbacks, corrections and the bear markets over just sitting in cash. My analysis and looking back using the above ten year total return performance percentages with a sum of $10,000 invested cash would have generated about $670.00 ... the income sleeves would have generated about $5,500 and equity income sleeves would have generated about $7,500. This does not take into account compounding. For a long term investor, such as myself, buy during a dip, pullback, correction, or bear market when stocks are oversold and you'll do better than the average. Buy above the average when stocks are overbought and your returns will be less than average over an extended period of time.
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