This is the new question on the block and its importance cannot be understated. We have witnessed, once again, that S&P 500 earnings per share have fallen. They recently announced that their earnings per share for Q4 of 2014 fell 14% from the previous year. Other research firms are reporting glum news as well. According to FactSet, their prediciting the S&P 500 will see a five percent drop in their earnings for Q1 of 2015. That’s not all they’re saying though either, they’re predicting we will see the Dow Jones Industrial Average decline for the first three quarters of 2015.
There is a growing problem with all of this though as Dawn Bennett has been pointing out on a regular basis. While the numbers on Main Street keep coming up negative and overall stagnant; the numbers on Wall Street keep setting new highs. This means we have a growing crevasse between the markets and the fundamentals. The dollar is also in a very difficult situation right now as it has gained roughly 25% over the past nine months. This has hurt U.S. exports and this level of increase has never been seen in the last thirty years. With major economies struggling all over the world and foreign governments buying the dollar to try and shore up losses we have reached a point where the dollar is definitely overbought.
As an investor it is definitely one of those times where you are trapped between a rock and a hard place. How is one supposed to effectively invest in an economy where everything seems so uncertain and unstable? One might say its fine to invest in the stock market because for the past six years it has ignored the weaknesses and problems in the economy. However looking at the various stock indexes from the past year or so we see that their growth has been rather low barely 1-2% and that isn’t factoring in the cost of trading and other expenses.
Furthermore, with corporate earnings down for the last few months, they are starting to rein in spending on employment and investment which means less hiring and more stagnant wages. Recently billionaire hedge fund manager Paul Tudor Jones exclaimed this market is “one of the worse markets of my life”. If someone with this much knowledge and influence is aware of such major issues then we should all be paying attention. There are ways for investors to avoid losing all of their assets in the impending economic storm but which one will truly be the best? Of course there is always the option of investing in gold and silver which have been a safe investment for the last five thousand plus years.
Bennett Group Financial Services LLC, based in Washington, D.C., is a comprehensive financial services firm committed to providing opportunities to clients’ as they seek long-term financial success. Its customized programs are designed with the potential to help grow, lower overall risk and conserve client assets by delivering a high level of personalized service and skill.
For more information, call 866-286-2268 or visit http://www.bennettgroupfinancial.com
Securities offered through Western International Securities Inc. (WIS), member FINRA/SIPC. BGFS and WIS are separate and unaffiliated entities.
About Dawn Bennett
Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting http://www.financialmythbusting.com
She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included rock legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN a as well as take podcasts on the road and forums for interaction.
She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett or firstname.lastname@example.org