It’s hard to be an optimist in the current investment climate – which is decidedly cooling.
The SWI isn’t too bad – the $50 watch is now worth $63.55, down from its highs of a week or so ago. Part of that decline is due to the Swiss national government and central bank pushing down on the Swiss franc, which had gotten so high it was hurting the Swiss economy.
When Swiss products get too expensive, people stop buying them. It’s fine when manufacturers willingly raise their prices, but this was all currency change. Mish doesn’t think the Swiss bank will have much success, but clearly they already have.
Oil prices continue to go down and are now at $82.70/bbl. That is reflected at the gas stations and could be good for the U.S. economy, since fuel prices are a measurable component in many products that get trucked, flown or sent by rail all over the country.
Gold hit another new high at $1855/oz. We notice that some people are starting to say that gold could be a small portion of your portfolio (if you are foolish enough to buy any), but please keep buying stocks and real estate, so the prices of index funds held by pension funds will stay up and also so brokers and financial advisors can still collect commissions.
We calculated dividends the Model Portfolio would have collected if we had owned 10 shares of each company to have been $266. Share price-wise, here’s the news for the week, down 18% since we started the index: