August 31, 2015

The Markets

U.S. stock markets finished last week higher than they started it, but the five-day ride was awfully bumpy.

Concerns about China’s slowing growth, shifting currency valuations, and falling stock markets, coupled with uncertainty about the Federal Reserve’s next policy move, contributed to malaise in world markets early last week.

After falling by about 6 percent the previous week, U.S. stocks went lower early last week. They flirted with correction status (a correction is a 10 percent drop from previous highs) before moving higher.

By midweek, markets were on the rebound, bolstered in part by the comments of New York Fed President William Dudley who indicated a September rate hike might not be all that compelling. and strong U.S. economic data also soothed some investors.

While the market’s end of week bounce was welcome traders and investors may have additional volatility to deal with.

Whether markets are volatile or calm this week, it’s important to remember that it’s impossible for any of us to control what happens in Washington, on Wall Street, or overseas. We can, however, control how we prepare for and respond to market volatility. I have continued to make edits in portfolios since last week’s commentary.

I understand that market volatility is uncomfortable, but it is not unusual and all markets have them at times. If you have any questions or would like to discuss recent events, please contact me and I’ll be glad to spend some time with you. I am making selective buys after down days so give this some time to work out and keep patient.

Stuck in Traffic

How bad is traffic congestion in the united states? It’s so bad, the average American spends the equivalent of about five vacation days sitting in traffic every year – and that’s just the tip of the iceberg.

As it turns outs, the Great Recession had a silver lining – less traffic and less congested roads. Today, according to researchers at the Texas A&M Transportation Institute, employment is up and so is the number of commuters on the road:

“According to the 2015 Urban Mobility Scorecard, travel delays due to traffic congestion caused drivers to waste more than 3 billion gallons of fuel and kept travelers stuck in their cars for nearly 7 billion extra hours – 42 hours per rush-hour commuter. The total nationwide price tag: $160 billion, or $960 per commuter.”

Of course, in some cities, people spend a lot more time inching along freeways. In Washington, D.C., drivers spend about 82 hours each year commuting; in Los Angeles, 80 hours; in San Francisco, 78 hours; and in New York, 74 hours. Across the nation, by 2020, commuter delays are expected to increase from 42 hours to 47 hours on average, raising the cost of congestion from $160 billion to $192 billion.

What’s to be done? Cities like Singapore, London, San Diego, Stockholm, and Milan have adopted “congestion pricing.” In San Diego, express toll-lanes allow drivers to bypass gridlocked free lanes, if they are willing to pay a fee. Other cities have cordon pricing. Drivers are charged a fee each time they enter a congested area, such as a city center. The state of Oregon is charging per mile driven (a system the state may use to replace fuel taxes in the future) and may begin to charge a higher rate for miles traveled during periods of congestion on heavily used roads.

Weekly Focus

 

“If opportunity doesn’t knock, build a door.”
Milton Berle, Comedian

Image courtesy of Nevermind42, used in accordance with the Creative Commons ShareAlike 3.0 license.

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