2018 Investment Outlook Seminar – The Quiz
See how much you were paying attention to Bob Landaas at the latest investment outlook seminar for clients. Or, if you weren’t there, learn a little about what you missed.
Click here for the answers – AFTER you take the quiz.
1. Bob noted that the Federal Reserve is likely halfway through raising short-term interest rates. Which one of these DOES NOT follow?
- Keep durations short.
- Reach for higher yield with lower-quality bonds.
- Expect four or five more quarter-point increases.
- The Fed’s current concern is more about normalizing rates than tamping down inflation.
2. In the 2017 seminar, Bob spoke of synchronized global growth as a bright spot for the U.S. economy. Which one of these WAS NOT among his 2018 updates on the topic?
- A stronger U.S. dollar has created problems in emerging markets.
- The U.S. dollar will continue to strengthen as the Federal Reserve raises interest rates.
- Except for China, global economies remain synchronized, thanks to the U.S. dollar.
- Demand for many commodities priced in U.S. dollars has declined.
3. In his updates on U.S. stocks, which of the following WAS NOT a point that Bob explained?
- Valuations are above average.
- Profit margins are narrowing.
- Valuations have compressed because of earnings growth.
- Revenue growth is contributing more to earnings.
4. Which one of the following IS NOT a reason to believe that the longest bull market in history can continue?
- Data suggest that American consumers are both spending more and saving more.
- At least for now, inflation is a non-event.
- Corporate profits are strong and have positive forecasts at least through 2020.
- The yield curve is flattening.
5. Despite signs for continued economic expansion, Bob advised clients to start preparing for the next downturn. Which of these IS NOT a reason to be cautious?
- Economists expect the boost from tax cuts to start fading between 2020 and 2022.
- Global economic growth has been slowing.
- Corporate debt has been rising, and higher interest rates will pressure companies that have borrowed a lot.
- Inflation already is high, which could force interest rates much higher.
6. In his 43 years advising investors, Bob never before saw growth stocks outperform value stocks in a 30-year comparison. Which of these DOES NOT follow?
- Growth stocks tend to hold up well in market sell-offs.
- The performance of value and growth stocks neared a record gap through the first half of 2018.
- Just four large-cap growth stocks that have accounted for about 40% of U.S. stock market gains so far in 2018.
- Investors can feel frustrated because value has been out of favor, but you never know when the tide will turn.
7. Which is Bob’s preferred price-earnings ratio to use when valuing the stock market?
- Trailing P/E – price divided by the preceding 12 months of actual earnings
- Forward P/E – price divided by the 12-month forecast of earnings
- CAPE Ratio – a cyclically adjusted formula using 10 years of prior earnings
- None of the above
8. Why did Bob share this chart on bear markets?
- To show there is no discernible pattern for stock sell-offs.
- To suggest keeping 40% of a retirement portfolio in relatively safe investments.
- To remind everyone that stocks sell off occasionally.
- To suggest, based on the last two sell-offs, that bear markets are getting shorter.
9. Bob suggested several considerations investors should remember to keep their portfolios balanced. Which one WAS NOT on his list?
- As long as profit margins are high, increase your portfolio’s share of stocks.
- U.S. stocks are less volatile than emerging markets.
- Large-cap stocks are less risky than small-caps.
- Bear markets can provide opportunities to find bargains.
10. Which equity market has experienced the best performance over the last nine years?
- Emerging markets
(initially posted October 5, 2018)
Also from the seminar
Selections important to your investments, a Money Talk Video with Kyle Tetting
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