[arrl-odv:29804] Market and portfolio update
ODV: I don't usually provide input on our portfolio other than at the end of a quarter or at BOD meetings, but the events of the last few weeks (and today) are a reason enough to give you an update. Since about the middle of February, stock and bond markets have wobbled and, particularly today, have reached territory that, while not uncharted, is territory that makes us realize that we are no longer in Kansas anymore, Toto. Here are some comparisons with where we are as of 3/9 and where we stood on 12/31, just over two months ago. Bonds. While normally the mundane slice of our (and most) portfolios, the recent interest rate slide has been unprecedented. On 12/31, 10-year Treasuries were earning 1.92%, a number that historically was a bit low but not abnormal. Today, the 10-year closed at 0.591% and 30-year bonds closed at 0.9%, both historic lows. Today was the first time in history that ALL maturities of US Treasury bonds and notes closed under 1%. First time ever. The good news is that prices have increased (the teeter-totter effect) but the bad news is that interest earnings are back in the miniscule range. The likelihood of negative interest rates in the US has increased substantially. Stocks. Today, all the major indices fell at a rate not seen since the Great Recession in 2008. The NASDAQ was down 7.3%, the S&P500 was down 7.6%, and the Dow was down 7.8%. Since 12/31, the S&P is down 15% with the other two recording similar declines. Before today, markets have been volatile and on a downward trajectory. Most of the volatility and decline has been attributed to the concern of what Coronavirus will do to the economy and to corporate earnings. That concern is well founded. There are no good answers as to what will happen to economic activity and markets hate uncertainty. However, today's swoon was due to the collapse of oil prices as a result of the implosion of OPEC+. Russia and Saudi Arabia could not agree on how the agreed-upon supply cut should be distributed whereupon the Saudis reduced their price and said they would increase production substantially. Then Russia did the same. The combination of lower demand from the economy and a big increase in supply dropped crude prices over 20% today. Since December, crude has fallen from $66 to $35.90 - a 46% decline. While that should be better for us at the pumps, it is probably a net negative for the US economy and a really, really big negative for shale and fracking. Sorry Texas and PA. There is considerable uncertainty as to how long this fight will last. The longer it lasts, the worse for domestic oil production. Going forward, the twin uncertainties of oil and Coronavirus will weigh on the market. It will be a while till we get a handle on either one. Markets will be volatile with swings in both directions although more on the down side than the up side. So, what is up (I should say down) with our portfolio. During mid-to-late February and continuing through last week, I sold some stock. The economic fundamentals were bothersome and it was time to lighten up. Over that period, I sold almost $1.4 million of stock and parked the funds in the money market account. Stock sales and market losses mean that our stock portfolio is now 42% of the total, down from slightly over 50% at the end of 2019. 2019 was a very good year and we made almost $4.4 million. Now we are giving some of that back. So far this year, our portfolio has lost $1.8 million, a 5.7% drop. While still an uncomfortable number, it is mitigated by the bond portfolio that is up a bit for the year so it is nothing like the headline 15% drop in the stock market. In round numbers, at the end of 2019 we were 50% stock, 48% bond, and 2% money market. As of 3/9, we are 42% stock, 52% bond, and 6% money market. I am as comfortable as I can be in this uncertain times with the current proportions. Finally, everything we own is liquid. While I might not want to sell something, I can if needed. We have sufficient cash to fund the initiatives we seek to fulfill. So, that's the news as of today. Markets run in cycles and sometimes those cycles are down. Tomorrow is another day and the sun will still come up. Let me know if you have questions. Rick, K7GM Frederick (Rick) Niswander, PhD, CPA, CGMA Professor of Accounting Bate 3110 East Carolina University Greenville, NC 27858
ODV: I don't usually provide input on our portfolio other than at the end of a quarter or at BOD meetings, but the events of the last few weeks (and today) are a reason enough to give you an update. Since about the middle of February, stock and bond markets have wobbled and, particularly today, have reached territory that, while not uncharted, is territory that makes us realize that we are no longer in Kansas anymore, Toto. Here are some comparisons with where we are as of 3/9 and where we stood on 12/31, just over two months ago. Bonds. While normally the mundane slice of our (and most) portfolios, the recent interest rate slide has been unprecedented. On 12/31, 10-year Treasuries were earning 1.92%, a number that historically was a bit low but not abnormal. Today, the 10-year closed at 0.591% and 30-year bonds closed at 0.9%, both historic lows. Today was the first time in history that ALL maturities of US Treasury bonds and notes closed under 1%. First time ever. The good news is that prices have increased (the teeter-totter effect) but the bad news is that interest earnings are back in the miniscule range. The likelihood of negative interest rates in the US has increased substantially. Stocks. Today, all the major indices fell at a rate not seen since the Great Recession in 2008. The NASDAQ was down 7.3%, the S&P500 was down 7.6%, and the Dow was down 7.8%. Since 12/31, the S&P is down 15% with the other two recording similar declines. Before today, markets have been volatile and on a downward trajectory. Most of the volatility and decline has been attributed to the concern of what Coronavirus will do to the economy and to corporate earnings. That concern is well founded. There are no good answers as to what will happen to economic activity and markets hate uncertainty. However, today's swoon was due to the collapse of oil prices as a result of the implosion of OPEC+. Russia and Saudi Arabia could not agree on how the agreed-upon supply cut should be distributed whereupon the Saudis reduced their price and said they would increase production substantially. Then Russia did the same. The combination of lower demand from the economy and a big increase in supply dropped crude prices over 20% today. Since December, crude has fallen from $66 to $35.90 - a 46% decline. While that should be better for us at the pumps, it is probably a net negative for the US economy and a really, really big negative for shale and fracking. Sorry Texas and PA. There is considerable uncertainty as to how long this fight will last. The longer it lasts, the worse for domestic oil production. Going forward, the twin uncertainties of oil and Coronavirus will weigh on the market. It will be a while till we get a handle on either one. Markets will be volatile with swings in both directions although more on the down side than the up side. So, what is up (I should say down) with our portfolio. During mid-to-late February and continuing through last week, I sold some stock. The economic fundamentals were bothersome and it was time to lighten up. Over that period, I sold almost $1.4 million of stock and parked the funds in the money market account. Stock sales and market losses mean that our stock portfolio is now 42% of the total, down from slightly over 50% at the end of 2019. 2019 was a very good year and we made almost $4.4 million. Now we are giving some of that back. So far this year, our portfolio has lost $1.8 million, a 5.7% drop. While still an uncomfortable number, it is mitigated by the bond portfolio that is up a bit for the year so it is nothing like the headline 15% drop in the stock market. In round numbers, at the end of 2019 we were 50% stock, 48% bond, and 2% money market. As of 3/9, we are 42% stock, 52% bond, and 6% money market. I am as comfortable as I can be in this uncertain times with the current proportions. Finally, everything we own is liquid. While I might not want to sell something, I can if needed. We have sufficient cash to fund the initiatives we seek to fulfill. So, that's the news as of today. Markets run in cycles and sometimes those cycles are down. Tomorrow is another day and the sun will still come up. Let me know if you have questions. Rick, K7GM Frederick (Rick) Niswander, PhD, CPA, CGMA Professor of Accounting Bate 3110 East Carolina University Greenville, NC 27858
Rick Thanks for the update. Interesting times to be sure. The work you do for the ARRL is much appreciated. 73, Rod Amateur Radio W6ROD ARRL Int’l Affairs Vice President
On Mar 9, 2020, at 6:57 PM, Niswander, Rick <NISWANDERF@ecu.edu> wrote:
ODV:
I don’t usually provide input on our portfolio other than at the end of a quarter or at BOD meetings, but the events of the last few weeks (and today) are a reason enough to give you an update.
Since about the middle of February, stock and bond markets have wobbled and, particularly today, have reached territory that, while not uncharted, is territory that makes us realize that we are no longer in Kansas anymore, Toto. Here are some comparisons with where we are as of 3/9 and where we stood on 12/31, just over two months ago.
Bonds. While normally the mundane slice of our (and most) portfolios, the recent interest rate slide has been unprecedented. On 12/31, 10-year Treasuries were earning 1.92%, a number that historically was a bit low but not abnormal. Today, the 10-year closed at 0.591% and 30-year bonds closed at 0.9%, both historic lows. Today was the first time in history that ALL maturities of US Treasury bonds and notes closed under 1%. First time ever. The good news is that prices have increased (the teeter-totter effect) but the bad news is that interest earnings are back in the miniscule range. The likelihood of negative interest rates in the US has increased substantially.
Stocks. Today, all the major indices fell at a rate not seen since the Great Recession in 2008. The NASDAQ was down 7.3%, the S&P500 was down 7.6%, and the Dow was down 7.8%. Since 12/31, the S&P is down 15% with the other two recording similar declines.
Before today, markets have been volatile and on a downward trajectory. Most of the volatility and decline has been attributed to the concern of what Coronavirus will do to the economy and to corporate earnings. That concern is well founded. There are no good answers as to what will happen to economic activity and markets hate uncertainty. However, today’s swoon was due to the collapse of oil prices as a result of the implosion of OPEC+. Russia and Saudi Arabia could not agree on how the agreed-upon supply cut should be distributed whereupon the Saudis reduced their price and said they would increase production substantially. Then Russia did the same. The combination of lower demand from the economy and a big increase in supply dropped crude prices over 20% today. Since December, crude has fallen from $66 to $35.90 – a 46% decline. While that should be better for us at the pumps, it is probably a net negative for the US economy and a really, really big negative for shale and fracking. Sorry Texas and PA. There is considerable uncertainty as to how long this fight will last. The longer it lasts, the worse for domestic oil production.
Going forward, the twin uncertainties of oil and Coronavirus will weigh on the market. It will be a while till we get a handle on either one. Markets will be volatile with swings in both directions although more on the down side than the up side.
So, what is up (I should say down) with our portfolio.
During mid-to-late February and continuing through last week, I sold some stock. The economic fundamentals were bothersome and it was time to lighten up. Over that period, I sold almost $1.4 million of stock and parked the funds in the money market account. Stock sales and market losses mean that our stock portfolio is now 42% of the total, down from slightly over 50% at the end of 2019.
2019 was a very good year and we made almost $4.4 million. Now we are giving some of that back. So far this year, our portfolio has lost $1.8 million, a 5.7% drop. While still an uncomfortable number, it is mitigated by the bond portfolio that is up a bit for the year so it is nothing like the headline 15% drop in the stock market.
In round numbers, at the end of 2019 we were 50% stock, 48% bond, and 2% money market. As of 3/9, we are 42% stock, 52% bond, and 6% money market. I am as comfortable as I can be in this uncertain times with the current proportions.
Finally, everything we own is liquid. While I might not want to sell something, I can if needed. We have sufficient cash to fund the initiatives we seek to fulfill.
So, that’s the news as of today. Markets run in cycles and sometimes those cycles are down. Tomorrow is another day and the sun will still come up.
Let me know if you have questions.
Rick, K7GM
Frederick (Rick) Niswander, PhD, CPA, CGMA Professor of Accounting Bate 3110 East Carolina University Greenville, NC 27858
_______________________________________________ arrl-odv mailing list arrl-odv@reflector.arrl.org https://reflector.arrl.org/mailman/listinfo/arrl-odv
Ditto. Tnx, Rick. 73Rick - K5UR -----Original Message----- From: Rod Stafford <w6rod@comcast.net> To: Niswander, Rick <NISWANDERF@ecu.edu> Cc: arrl-odv@reflector.arrl.org <arrl-odv@reflector.arrl.org> Sent: Mon, Mar 9, 2020 9:57 pm Subject: [arrl-odv:29806] Re: Market and portfolio update Rick Thanks for the update. Interesting times to be sure. The work you do for the ARRL is much appreciated. 73, Rod Amateur Radio W6RODARRL Int’l Affairs Vice President On Mar 9, 2020, at 6:57 PM, Niswander, Rick <NISWANDERF@ecu.edu> wrote: #yiv7269488604 #yiv7269488604 -- _filtered {} _filtered {} #yiv7269488604 #yiv7269488604 p.yiv7269488604MsoNormal, #yiv7269488604 li.yiv7269488604MsoNormal, #yiv7269488604 div.yiv7269488604MsoNormal {margin:0in;margin-bottom:.0001pt;font-size:11.0pt;font-family:sans-serif;} #yiv7269488604 a:link, #yiv7269488604 span.yiv7269488604MsoHyperlink {color:#0563C1;text-decoration:underline;} #yiv7269488604 a:visited, #yiv7269488604 span.yiv7269488604MsoHyperlinkFollowed {color:#954F72;text-decoration:underline;} #yiv7269488604 p.yiv7269488604msonormal0, #yiv7269488604 li.yiv7269488604msonormal0, #yiv7269488604 div.yiv7269488604msonormal0 {margin-right:0in;margin-left:0in;font-size:11.0pt;font-family:sans-serif;} #yiv7269488604 span.yiv7269488604EmailStyle18 {font-family:sans-serif;color:windowtext;} #yiv7269488604 span.yiv7269488604EmailStyle19 {font-family:sans-serif;color:windowtext;} #yiv7269488604 .yiv7269488604MsoChpDefault {font-size:10.0pt;} _filtered {} #yiv7269488604 div.yiv7269488604WordSection1 {} #yiv7269488604 ODV: I don’t usually provide input on our portfolio other than at the end of a quarter or at BOD meetings, but the events of the last few weeks (and today) are a reason enough to give you an update. Since about the middle of February, stock and bond markets have wobbled and, particularly today, have reached territory that, while not uncharted, is territory that makes us realize that we are no longer in Kansas anymore, Toto. Here are some comparisons with where we are as of 3/9 and where we stood on 12/31, just over two months ago. Bonds. While normally the mundane slice of our (and most) portfolios, the recent interest rate slide has been unprecedented. On 12/31, 10-year Treasuries were earning 1.92%, a number that historically was a bit low but not abnormal. Today, the 10-year closed at 0.591% and 30-year bonds closed at 0.9%, both historic lows. Today was the first time in history that ALL maturities of US Treasury bonds and notes closed under 1%. First time ever. The good news is that prices have increased (the teeter-totter effect) but the bad news is that interest earnings are back in the miniscule range. The likelihood of negative interest rates in the US has increased substantially. Stocks. Today, all the major indices fell at a rate not seen since the Great Recession in 2008. The NASDAQ was down 7.3%, the S&P500 was down 7.6%, and the Dow was down 7.8%. Since 12/31, the S&P is down 15% with the other two recording similar declines. Before today, markets have been volatile and on a downward trajectory. Most of the volatility and decline has been attributed to the concern of what Coronavirus will do to the economy and to corporate earnings. That concern is well founded. There are no good answers as to what will happen to economic activity and markets hate uncertainty. However, today’s swoon was due to the collapse of oil prices as a result of the implosion of OPEC+. Russia and Saudi Arabia could not agree on how the agreed-upon supply cut should be distributed whereupon the Saudis reduced their price and said they would increase production substantially. Then Russia did the same. The combination of lower demand from the economy and a big increase in supply dropped crude prices over 20% today. Since December, crude has fallen from $66 to $35.90 – a 46% decline. While that should be better for us at the pumps, it is probably a net negative for the US economy and a really, really big negative for shale and fracking. Sorry Texas and PA. There is considerable uncertainty as to how long this fight will last. The longer it lasts, the worse for domestic oil production. Going forward, the twin uncertainties of oil and Coronavirus will weigh on the market. It will be a while till we get a handle on either one. Markets will be volatile with swings in both directions although more on the down side than the up side. So, what is up (I should say down) with our portfolio. During mid-to-late February and continuing through last week, I sold some stock. The economic fundamentals were bothersome and it was time to lighten up. Over that period, I sold almost $1.4 million of stock and parked the funds in the money market account. Stock sales and market losses mean that our stock portfolio is now 42% of the total, down from slightly over 50% at the end of 2019. 2019 was a very good year and we made almost $4.4 million. Now we are giving some of that back. So far this year, our portfolio has lost $1.8 million, a 5.7% drop. While still an uncomfortable number, it is mitigated by the bond portfolio that is up a bit for the year so it is nothing like the headline 15% drop in the stock market. In round numbers, at the end of 2019 we were 50% stock, 48% bond, and 2% money market. As of 3/9, we are 42% stock, 52% bond, and 6% money market. I am as comfortable as I can be in this uncertain times with the current proportions. Finally, everything we own is liquid. While I might not want to sell something, I can if needed. We have sufficient cash to fund the initiatives we seek to fulfill. So, that’s the news as of today. Markets run in cycles and sometimes those cycles are down. Tomorrow is another day and the sun will still come up. Let me know if you have questions. Rick, K7GM Frederick (Rick) Niswander, PhD, CPA, CGMA Professor of Accounting Bate 3110 East Carolina University Greenville, NC 27858 _______________________________________________ arrl-odv mailing list arrl-odv@reflector.arrl.org https://reflector.arrl.org/mailman/listinfo/arrl-odv _______________________________________________ arrl-odv mailing list arrl-odv@reflector.arrl.org https://reflector.arrl.org/mailman/listinfo/arrl-odv
Thank you for the commentary, Rick. To paraphrase an old Chinese proverb that we "may live in interesting times" seems particularly apropos. I just returned on a nearly empty flight from KH6 land, and the concern on a personal level was palpable. Living in the city that just docked The Grand Princess and is headquarters to the Clorox Corporation, I greatly appreciate your calm and rational management and diversification of the League's portfolio which should greatly help us to weather the coming storm.Travel safely everyone, as advised by the CDC and other health experts, and take care! 73, Jim K6JAT Sent from my Sprint Samsung Galaxy S8. -------- Original message --------From: "Niswander, Rick" <NISWANDERF@ecu.edu> Date: 3/9/20 6:57 PM (GMT-08:00) To: arrl-odv@reflector.arrl.org Subject: [arrl-odv:29805] Market and portfolio update ODV: I don’t usually provide input on our portfolio other than at the end of a quarter or at BOD meetings, but the events of the last few weeks (and today) are a reason enough to give you an update. Since about the middle of February, stock and bond markets have wobbled and, particularly today, have reached territory that, while not uncharted, is territory that makes us realize that we are no longer in Kansas anymore, Toto. Here are some comparisons with where we are as of 3/9 and where we stood on 12/31, just over two months ago. Bonds. While normally the mundane slice of our (and most) portfolios, the recent interest rate slide has been unprecedented. On 12/31, 10-year Treasuries were earning 1.92%, a number that historically was a bit low but not abnormal. Today, the 10-year closed at 0.591% and 30-year bonds closed at 0.9%, both historic lows. Today was the first time in history that ALL maturities of US Treasury bonds and notes closed under 1%. First time ever. The good news is that prices have increased (the teeter-totter effect) but the bad news is that interest earnings are back in the miniscule range. The likelihood of negative interest rates in the US has increased substantially. Stocks. Today, all the major indices fell at a rate not seen since the Great Recession in 2008. The NASDAQ was down 7.3%, the S&P500 was down 7.6%, and the Dow was down 7.8%. Since 12/31, the S&P is down 15% with the other two recording similar declines. Before today, markets have been volatile and on a downward trajectory. Most of the volatility and decline has been attributed to the concern of what Coronavirus will do to the economy and to corporate earnings. That concern is well founded. There are no good answers as to what will happen to economic activity and markets hate uncertainty. However, today’s swoon was due to the collapse of oil prices as a result of the implosion of OPEC+. Russia and Saudi Arabia could not agree on how the agreed-upon supply cut should be distributed whereupon the Saudis reduced their price and said they would increase production substantially. Then Russia did the same. The combination of lower demand from the economy and a big increase in supply dropped crude prices over 20% today. Since December, crude has fallen from $66 to $35.90 – a 46% decline. While that should be better for us at the pumps, it is probably a net negative for the US economy and a really, really big negative for shale and fracking. Sorry Texas and PA. There is considerable uncertainty as to how long this fight will last. The longer it lasts, the worse for domestic oil production. Going forward, the twin uncertainties of oil and Coronavirus will weigh on the market. It will be a while till we get a handle on either one. Markets will be volatile with swings in both directions although more on the down side than the up side. So, what is up (I should say down) with our portfolio. During mid-to-late February and continuing through last week, I sold some stock. The economic fundamentals were bothersome and it was time to lighten up. Over that period, I sold almost $1.4 million of stock and parked the funds in the money market account. Stock sales and market losses mean that our stock portfolio is now 42% of the total, down from slightly over 50% at the end of 2019. 2019 was a very good year and we made almost $4.4 million. Now we are giving some of that back. So far this year, our portfolio has lost $1.8 million, a 5.7% drop. While still an uncomfortable number, it is mitigated by the bond portfolio that is up a bit for the year so it is nothing like the headline 15% drop in the stock market. In round numbers, at the end of 2019 we were 50% stock, 48% bond, and 2% money market. As of 3/9, we are 42% stock, 52% bond, and 6% money market. I am as comfortable as I can be in this uncertain times with the current proportions. Finally, everything we own is liquid. While I might not want to sell something, I can if needed. We have sufficient cash to fund the initiatives we seek to fulfill. So, that’s the news as of today. Markets run in cycles and sometimes those cycles are down. Tomorrow is another day and the sun will still come up. Let me know if you have questions. Rick, K7GM Frederick (Rick) Niswander, PhD, CPA, CGMA Professor of Accounting Bate 3110 East Carolina University Greenville, NC 27858
Dear ODV Members: As a financial planner in my day job, I not only commend Treasurer Niswander on his astute management of ARRL's portfolio, but also applaud him for taking time to provide perspective to the board during the most turbulent week in financial markets in 12 years. A 5.7% decline when major equity indices have dropped as much as 10% in the last week is laudatory. Rick's management style exemplifies the height of fiduciary responsibility. While we are all grateful for his guiding hand during these difficult times, the decline in the portfolio should remind us long term that we need to continually pursue donations and planned giving. With so many projects underway to ensure the future of ARRL, a strong and robust portfolio is necessary to keep the League relevant and moving forward. 73 de Bill Morine, N2COP Vice Director - Roanoke Division Representing ARRL members in North Carolina, South Carolina, Virginia and West Virginia <http://www.arrl-roanoke.org> www.arrl-roanoke.org Facebook Page: ARRL Roanoke Division ARRL - The National Association for Amateur RadioT From: arrl-odv <arrl-odv-bounces@reflector.arrl.org> On Behalf Of Niswander, Rick Sent: Monday, March 9, 2020 9:57 PM To: arrl-odv@reflector.arrl.org Subject: [arrl-odv:29805] Market and portfolio update ODV: I don't usually provide input on our portfolio other than at the end of a quarter or at BOD meetings, but the events of the last few weeks (and today) are a reason enough to give you an update. Since about the middle of February, stock and bond markets have wobbled and, particularly today, have reached territory that, while not uncharted, is territory that makes us realize that we are no longer in Kansas anymore, Toto. Here are some comparisons with where we are as of 3/9 and where we stood on 12/31, just over two months ago. Bonds. While normally the mundane slice of our (and most) portfolios, the recent interest rate slide has been unprecedented. On 12/31, 10-year Treasuries were earning 1.92%, a number that historically was a bit low but not abnormal. Today, the 10-year closed at 0.591% and 30-year bonds closed at 0.9%, both historic lows. Today was the first time in history that ALL maturities of US Treasury bonds and notes closed under 1%. First time ever. The good news is that prices have increased (the teeter-totter effect) but the bad news is that interest earnings are back in the miniscule range. The likelihood of negative interest rates in the US has increased substantially. Stocks. Today, all the major indices fell at a rate not seen since the Great Recession in 2008. The NASDAQ was down 7.3%, the S&P500 was down 7.6%, and the Dow was down 7.8%. Since 12/31, the S&P is down 15% with the other two recording similar declines. Before today, markets have been volatile and on a downward trajectory. Most of the volatility and decline has been attributed to the concern of what Coronavirus will do to the economy and to corporate earnings. That concern is well founded. There are no good answers as to what will happen to economic activity and markets hate uncertainty. However, today's swoon was due to the collapse of oil prices as a result of the implosion of OPEC+. Russia and Saudi Arabia could not agree on how the agreed-upon supply cut should be distributed whereupon the Saudis reduced their price and said they would increase production substantially. Then Russia did the same. The combination of lower demand from the economy and a big increase in supply dropped crude prices over 20% today. Since December, crude has fallen from $66 to $35.90 - a 46% decline. While that should be better for us at the pumps, it is probably a net negative for the US economy and a really, really big negative for shale and fracking. Sorry Texas and PA. There is considerable uncertainty as to how long this fight will last. The longer it lasts, the worse for domestic oil production. Going forward, the twin uncertainties of oil and Coronavirus will weigh on the market. It will be a while till we get a handle on either one. Markets will be volatile with swings in both directions although more on the down side than the up side. So, what is up (I should say down) with our portfolio. During mid-to-late February and continuing through last week, I sold some stock. The economic fundamentals were bothersome and it was time to lighten up. Over that period, I sold almost $1.4 million of stock and parked the funds in the money market account. Stock sales and market losses mean that our stock portfolio is now 42% of the total, down from slightly over 50% at the end of 2019. 2019 was a very good year and we made almost $4.4 million. Now we are giving some of that back. So far this year, our portfolio has lost $1.8 million, a 5.7% drop. While still an uncomfortable number, it is mitigated by the bond portfolio that is up a bit for the year so it is nothing like the headline 15% drop in the stock market. In round numbers, at the end of 2019 we were 50% stock, 48% bond, and 2% money market. As of 3/9, we are 42% stock, 52% bond, and 6% money market. I am as comfortable as I can be in this uncertain times with the current proportions. Finally, everything we own is liquid. While I might not want to sell something, I can if needed. We have sufficient cash to fund the initiatives we seek to fulfill. So, that's the news as of today. Markets run in cycles and sometimes those cycles are down. Tomorrow is another day and the sun will still come up. Let me know if you have questions. Rick, K7GM Frederick (Rick) Niswander, PhD, CPA, CGMA Professor of Accounting Bate 3110 East Carolina University Greenville, NC 27858
Thanks, Rick It's a good feeling, knowing you are on top of all this and making the decisions you do. Hasty actions in times like this normally net long term losses but foresight and short term plan adjustments flatten the curve. You have been predicting this for at least the last year and a half. Appreciate the update sir. 73.. Mark, HDX On Mon, Mar 9, 2020 at 6:46 PM Niswander, Rick <NISWANDERF@ecu.edu> wrote:
ODV:
I don’t usually provide input on our portfolio other than at the end of a quarter or at BOD meetings, but the events of the last few weeks (and today) are a reason enough to give you an update.
Since about the middle of February, stock and bond markets have wobbled and, particularly today, have reached territory that, while not uncharted, is territory that makes us realize that we are no longer in Kansas anymore, Toto. Here are some comparisons with where we are as of 3/9 and where we stood on 12/31, just over two months ago.
Bonds. While normally the mundane slice of our (and most) portfolios, the recent interest rate slide has been unprecedented. On 12/31, 10-year Treasuries were earning 1.92%, a number that historically was a bit low but not abnormal. Today, the 10-year closed at 0.591% and 30-year bonds closed at 0.9%, both historic lows. Today was the first time in history that ALL maturities of US Treasury bonds and notes closed under 1%. First time ever. The good news is that prices have increased (the teeter-totter effect) but the bad news is that interest earnings are back in the miniscule range. The likelihood of negative interest rates in the US has increased substantially.
Stocks. Today, all the major indices fell at a rate not seen since the Great Recession in 2008. The NASDAQ was down 7.3%, the S&P500 was down 7.6%, and the Dow was down 7.8%. Since 12/31, the S&P is down 15% with the other two recording similar declines.
Before today, markets have been volatile and on a downward trajectory. Most of the volatility and decline has been attributed to the concern of what Coronavirus will do to the economy and to corporate earnings. That concern is well founded. There are no good answers as to what will happen to economic activity and markets hate uncertainty. However, today’s swoon was due to the collapse of oil prices as a result of the implosion of OPEC+. Russia and Saudi Arabia could not agree on how the agreed-upon supply cut should be distributed whereupon the Saudis reduced their price and said they would increase production substantially. Then Russia did the same. The combination of lower demand from the economy and a big increase in supply dropped crude prices over 20% today. Since December, crude has fallen from $66 to $35.90 – a 46% decline. While that should be better for us at the pumps, it is probably a net negative for the US economy and a really, really big negative for shale and fracking. Sorry Texas and PA. There is considerable uncertainty as to how long this fight will last. The longer it lasts, the worse for domestic oil production.
Going forward, the twin uncertainties of oil and Coronavirus will weigh on the market. It will be a while till we get a handle on either one. Markets will be volatile with swings in both directions although more on the down side than the up side.
So, what is up (I should say down) with our portfolio.
During mid-to-late February and continuing through last week, I sold some stock. The economic fundamentals were bothersome and it was time to lighten up. Over that period, I sold almost $1.4 million of stock and parked the funds in the money market account. Stock sales and market losses mean that our stock portfolio is now 42% of the total, down from slightly over 50% at the end of 2019.
2019 was a very good year and we made almost $4.4 million. Now we are giving some of that back. So far this year, our portfolio has lost $1.8 million, a 5.7% drop. While still an uncomfortable number, it is mitigated by the bond portfolio that is up a bit for the year so it is nothing like the headline 15% drop in the stock market.
In round numbers, at the end of 2019 we were 50% stock, 48% bond, and 2% money market. As of 3/9, we are 42% stock, 52% bond, and 6% money market. I am as comfortable as I can be in this uncertain times with the current proportions.
Finally, everything we own is liquid. While I might not want to sell something, I can if needed. We have sufficient cash to fund the initiatives we seek to fulfill.
So, that’s the news as of today. Markets run in cycles and sometimes those cycles are down. Tomorrow is another day and the sun will still come up.
Let me know if you have questions.
Rick, K7GM
Frederick (Rick) Niswander, PhD, CPA, CGMA
Professor of Accounting
Bate 3110
East Carolina University
Greenville, NC 27858
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TU Rick! Cool heads will prevail. I could also quote Kipling, but I’ll spare us from that. I think you have a handle on it. I’m not buying all the hysteria, however I am utilizing this swing and buying some stocks. Carry on sir. 73 David A. Norris, K5UZ Director, Delta Division Sent from my iPhone
On Mar 9, 2020, at 8:46 PM, Niswander, Rick <NISWANDERF@ecu.edu> wrote:
ODV:
I don’t usually provide input on our portfolio other than at the end of a quarter or at BOD meetings, but the events of the last few weeks (and today) are a reason enough to give you an update.
Since about the middle of February, stock and bond markets have wobbled and, particularly today, have reached territory that, while not uncharted, is territory that makes us realize that we are no longer in Kansas anymore, Toto. Here are some comparisons with where we are as of 3/9 and where we stood on 12/31, just over two months ago.
Bonds. While normally the mundane slice of our (and most) portfolios, the recent interest rate slide has been unprecedented. On 12/31, 10-year Treasuries were earning 1.92%, a number that historically was a bit low but not abnormal. Today, the 10-year closed at 0.591% and 30-year bonds closed at 0.9%, both historic lows. Today was the first time in history that ALL maturities of US Treasury bonds and notes closed under 1%. First time ever. The good news is that prices have increased (the teeter-totter effect) but the bad news is that interest earnings are back in the miniscule range. The likelihood of negative interest rates in the US has increased substantially.
Stocks. Today, all the major indices fell at a rate not seen since the Great Recession in 2008. The NASDAQ was down 7.3%, the S&P500 was down 7.6%, and the Dow was down 7.8%. Since 12/31, the S&P is down 15% with the other two recording similar declines.
Before today, markets have been volatile and on a downward trajectory. Most of the volatility and decline has been attributed to the concern of what Coronavirus will do to the economy and to corporate earnings. That concern is well founded. There are no good answers as to what will happen to economic activity and markets hate uncertainty. However, today’s swoon was due to the collapse of oil prices as a result of the implosion of OPEC+. Russia and Saudi Arabia could not agree on how the agreed-upon supply cut should be distributed whereupon the Saudis reduced their price and said they would increase production substantially. Then Russia did the same. The combination of lower demand from the economy and a big increase in supply dropped crude prices over 20% today. Since December, crude has fallen from $66 to $35.90 – a 46% decline. While that should be better for us at the pumps, it is probably a net negative for the US economy and a really, really big negative for shale and fracking. Sorry Texas and PA. There is considerable uncertainty as to how long this fight will last. The longer it lasts, the worse for domestic oil production.
Going forward, the twin uncertainties of oil and Coronavirus will weigh on the market. It will be a while till we get a handle on either one. Markets will be volatile with swings in both directions although more on the down side than the up side.
So, what is up (I should say down) with our portfolio.
During mid-to-late February and continuing through last week, I sold some stock. The economic fundamentals were bothersome and it was time to lighten up. Over that period, I sold almost $1.4 million of stock and parked the funds in the money market account. Stock sales and market losses mean that our stock portfolio is now 42% of the total, down from slightly over 50% at the end of 2019.
2019 was a very good year and we made almost $4.4 million. Now we are giving some of that back. So far this year, our portfolio has lost $1.8 million, a 5.7% drop. While still an uncomfortable number, it is mitigated by the bond portfolio that is up a bit for the year so it is nothing like the headline 15% drop in the stock market.
In round numbers, at the end of 2019 we were 50% stock, 48% bond, and 2% money market. As of 3/9, we are 42% stock, 52% bond, and 6% money market. I am as comfortable as I can be in this uncertain times with the current proportions.
Finally, everything we own is liquid. While I might not want to sell something, I can if needed. We have sufficient cash to fund the initiatives we seek to fulfill.
So, that’s the news as of today. Markets run in cycles and sometimes those cycles are down. Tomorrow is another day and the sun will still come up.
Let me know if you have questions.
Rick, K7GM
Frederick (Rick) Niswander, PhD, CPA, CGMA Professor of Accounting Bate 3110 East Carolina University Greenville, NC 27858
_______________________________________________ arrl-odv mailing list arrl-odv@reflector.arrl.org https://reflector.arrl.org/mailman/listinfo/arrl-odv
I'm retired with a 401K, so it looks like I'll be filling out a job applications soon! ;-) Thanks also to Rick. It's a wonderful service he provides the League. Keep calm and carry on! 73; Mike W7VO
participants (8)
-
David Norris -
k5ur＠aol.com -
k6jat -
Mark J Tharp -
Michael Ritz -
n2cop＠ec.rr.com -
Niswander, Rick -
Rod Stafford