Tag Archives: NYSEARCA:SPY

12 Questions for Your Investing New Year’s Resolutions

Reflecting on one’s investing process and habits is a valuable learning process. First, you can seek to understand what your current investing habits are. What can you improve on? What are you not happy with? By reflecting on these 12 questions, I hope that we can all aim for a more prosperous new year.

The new year in less than a week will be a fresh start. So, now’s the perfect time to make the New Year’s Resolutions for 2017.

Here are some questions to get you started to shape your resolutions.

First, seek to understand your current investing habits so that you can see where to improve if you’re not happy with it.

How much are you saving each month for investing?

The September 2014 Census Bureau revealed that the median household income in the U.S. was almost $52,000. If 10% of that was saved, $5,200 per year or about $433 per month can be invested.

If it costs you $10 to trade, perhaps you are only willing to pay a maximum of 1% for the trade, so that you’d save up $1,000 before investing in a stock.

By investing $5,200 a year compounded annually for a conservative market return of 7% in a market-wide fund such as the S&P 500 ETF (NYSEARCA:SPY), the results will be as follows.

Year Amount You Saved Portfolio Total
10 $52,000 $75,002
20 $104,000 $225,733
30 $156,000 $528,650
40 $208,000 $1,137,410

If you’re unsatisfied with these projections, you can increase your savings rate, aim for higher returns, or work longer to save more.

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Is this a Market Top? What Will You Do?

You might have noticed the general market represented by the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is trading in a sideways channel between roughly $185 and $209.

SPY technical chart May 2016

In fact, Financial Visualization’s daily chart marks a double top, which technically means it’s going down from here. There’s a strong support at $180, but if it falls through that, there will be more downside.

SPY finviz chart May 2016

OK, so all of this is like reading tea leaves. How does the market look fundamentally?

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Consumer Staple and Utility Stocks are Near All Time Highs

The S&P 500 that represents the U.S. market is near an all-time high which might make stock investors nervous, especially when the market has been trading sideways. What should stock investors do? The short answer is to ignore the market and focus on individual companies. The long answer will come later in this article.

The S&P 500 has been trading in a sideways channel since August 2015. Right now, NYSEARCA:SPY is back at the top of the channel, and if it doesn’t break above the US$208 resistance persistently, it will head back down. If SPY falls past the US$185 support persistently, this will mark the top of the market for the time being.

SPY chart

SPY Weekly Chart

Investors have been piling on to the consumer staples and utilities as the select ETFs have been hitting new highs. See the Consumer Staples ETF (NYSEARCA:XLP) and Utilities ETF (NYSEARCA:XLU) charts below.

XLP chart

Consumer Staples ETF Weekly Chart

XLU chart

Utilities ETF Weekly Chart

Both the Consumer Staples ETF and Utilities ETF look like they’re losing steam as they hit or are near overbought territories. Read More