The market

I haven’t written about the stock market lately. It has been my hobby since February, 1982. The market has given me a window into the world and a doorway to meet friends I might otherwise never know. At various times over these four decades, it has provided a diversion, from things like the war in Ukraine.

My stock universe is small compared to thousands of companies worldwide. When employed, I kept up with 20 or 25 companies. Now, there are 37 dividend-paying companies in my retirement portfolio and a few more on my watchlist. Every day I’m grateful to those who’ve taught me about the market.

We’re in a volatile time as the economy is being weaned off artificially low interest rates, as we struggle with a global pandemic, as we suffer from polarization at home and as a war rages in Europe. The economy and the market have held up amazingly well, but volatility reflects some potential headwinds.

I monitor each stock’s price relative to its 52-week price range. As of Friday, 11 of 37 were at least 20% below their 52-week high. Some might see a buying opportunity; others might see a reason to avoid stocks entirely. I’m not recommending anything, but simply illustrating today’s market volatility.

The number indicates the relationship to its 52-week high: Leggett & Platt (-37%); Artisan Partners (-32%); Intel (-31%); AT&T (-31%); 3M (-29%); Air Products & Chemicals (-27%); Unilever (-27%); BlackRock (-24%); Cummins (-24%); Simon Property Group (-24%); and STORE Capital (-21%).

From “What’s behind the current stock market volatility?” by Amna Nawaz, PBS NewsHour, January 24, 2022 (The link will take you to a transcript of this report and a video of an interview with Dana Patterson)

3 thoughts on “The market”

  1. Wow Ted. That is alarming information. I don’t own individual stocks anymore and have a managed account instead. I leave it to the managers and don’t ever look at it.

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    1. That’s why money managers are there, so you can focus on more important things.

      So, please don’t let this alarm you. Fluctuations are normal, though somewhat elevated now. During times of economic transition, it’s not unusual to see emotional swings in valuations. Some of my stocks are up more than 20% from their 52-week low price: Pfizer (+55%), Bristol-Myers Squibb (+33%), Prudential Financial (+31%), Toronto-Dominion Bank (+29%), PepsiCo (+23%). The day-to-day price movement can be unnerving. Rising inflation is a factor, along with geo-political tension. China-related stocks have been very volatile.

      My focus is on dividend income. Fortunately, the dividends generally are steady, often with incremental annual increases. So, I don’t pay much attention to price fluctuation, other than looking for extreme undervaluation (which may mean adding a few more shares) or extreme overvaluation (which may mean trimming a few shares). The 37 stocks in this portfolio average 24 consecutive years of dividend increases. That conveys a steadier picture. Procter & Gamble has raised the dividend 65 consecutive years, Johnson & Johnson 59 years, Colgate-Palmolive 58 years, etc.

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