Hulbert Cites Bear-Market Warning Indicator

  In a recent MarketWatch article, Mark Hulbert presents a market-timing indicator that “has a better historical track record than the cyclically adjusted price to earnings ratio” made famous by Nobel Laureate Robert Schiller. The indicator, he writes, is the “average portfolio allocation that U.S. households have to equities,” which has reached its current level five other times since the 1980s.” Four of those times, Hulbert asserts, “came right before major stock market tops.” Hulbert reports that, according to recent data from the Federal Reserve, U.S. households have 39.2% of their financial assets in equities. In 2015, it was 38.9% […]

Hulbert Says Momentum Investing Lives

There are still good reasons for investors to pursue a momentum strategy, writes Mark Hulbert in a recent Wall Street Journal article. He offers data collected by Eugene Fama (University of Chicago) and Kenneth French (Dartmouth College) showing that over the past ten years the stocks in the top decile vis a vis performance outperformed the S&P 500 by just 1.3 percentage points. “That is less than one-fifth as much as the strategy’s average annual advantage over the past 90 years, and certainly not enough to pay the considerable expenses…involved in the high turnover of a momentum portfolio.” But Hulbert […]

Hulbert on When to Fire Your Investment Adviser

Market-lagging performance, writes Mark Hulbert in a recent MarketWatch article, is not a good enough reason to fire your adviser. It’s extremely difficult, Hulbert says, to beat the market by “picking individual securities, ETFs or mutual funds—even among those with stellar track records for past performance.” He argues that, even those advisers and investment approaches that outperform will suffer periods of lackluster returns over the long-term. Hulbert cites the example of Warren Buffett and Berkshire Hathaway, noting that over the last eight years the legendary investor has “lagged the S&P 500 by 2.7 percentage points a year on an annualized […]

Hulbert Says War Doesn’t Scare the Stock Market

While the stock market doesn’t like war, the uncertainty that precedes a foreign military operation is typically resolved soon after any U.S.-led hostilities begin, and the market responds very positively. This according to Mark Hulbert in a recent Barron’s article. Hulbert cites the countries “saber-rattling directed at North Korea and Syria” as recent examples corresponding to a dip in the Dow Jones Industrial Average (Validea note: this as of April 20th—the index has since picked up slightly). “This period of market uncertainty,” writes Hulbert,” is likely to continue so long as uncertainty remains elevated.” Note: Hulbert explains that the above-cited […]

Hulbert: Don’t Believe These Old Market Adages

When investors follow popular stock market beliefs and seasonal patterns, the only people who make money are the brokers earnings trading fees from the subsequent buying and selling, writes Mark Hulbert in last week’s USA TODAY. Hulbert, founder of the Hulbert Financial Digest, shared his insights on the following three widely-assumed “strikes” against the market: “Sell in May and go away:” The notion that investors should go to cash on May 1st and not return to the market until Halloween. Hulbert argues that, while over the last ten years the market has tended to show strong performance between Halloween and […]