Overall Themes Impacting Stocks during November – December 2014

There has been a lot of activity in the stock market recently. Rather than put this on the top of every post I am going to summarize and then refer to these themes within each individual portfolio update. Here are some of themes that have hit many of the stocks:

– crude oil prices crashed – the price of crude has gone from $90 – $100 / barrel to $60 and under. This impacts oil and gas related stocks in a negative way. It also has some positive effects on goods that (poorer) consumers spend more on, companies like Wal-Mart
– the US dollar rose – many foreign currencies fell against the rising US dollar. This hits all of these ADR’s since they fall when the dollar rises and vice versa. The amount of the impact depends on their currency’s particular performance vs. the US dollar
– geopolitical risks – stocks in Russia and some other hard hit areas have fallen very hard. We don’t have many of these in our portfolio
– tech continues to rise – among all of these items we have had a rally in some US stocks, particularly tech stocks and some other sectors
– dividend yields are valued – since interest rates are low and continue to fall (measured by yields on US treasuries), companies that pay out income (dividends) are (mostly) well valued by the market. Note that it is unusual for dividend yields to be this high relative to US Treasury yields

The question is – are these short term themes or long term themes, or somewhere in the middle? If oil prices have gone down, do you sell now, at their lower valued state? Or will they come back over some (reasonable) period of time.

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