Dow Jones Today Dips Slightly as Homebuilder Confidence Plunges

The Dow Jones today is flat after a steep drop in homebuilder confidence.

Feb 18, 2014 at 1:31PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The Dow Jones Industrial Average (DJINDICES:^DJI) down nine points was unchanged, at 16,144, at 1:30 p.m. after a new report indicated plunging homebuilder confidence.The S&P 500 (SNPINDEX:^GSPC) was up three points to 1,841.

There was one U.S. economic release today.





NAHB housing-market index




The National Association of Home Builders reported that its housing market index reading fell 10 points to 46 in February. Economists had expected the index to remain flat at 56.


Source: NAHB/Wells Fargo Housing Market Index.

Association Chairman Kevin Kelly highlighted a few key reasons for the steep drop in homebuilder confidence: "Significant weather conditions across most of the country led to a decline in buyer traffic last month. Builders also have additional concerns about meeting ongoing and future demand due to a shortage of lots and labor."

Adverse weather conditions of December and January have been blamed for everything from poor earnings, to the terrible employment reports for December and January, to ugly January retail sales. Investors need to ask themselves if weather is solely to blame for the bad economic data and homebuilder confidence, or are there larger problems that are pushing down demand. One of the culprits of an economic slowdown, particularly in the housing market, has been the jump in interest and mortgage rates over the past eight months.

10 Year Treasury Rate Chart

10 Year Treasury Rate data by YCharts.

This jump in rates makes it harder for companies or individuals to refinance their debt and get new loans, both of which have been drivers of the economy. While companies are beginning to suffer from higher rates, one sector is benefiting: banks.

Do you hate your bank? If you're like most Americans, chances are good that you answered yes to that question. While that's not great news for consumers, it certainly creates opportunity for savvy investors. That's because there's a brand-new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banking model. And amazingly, despite its rapid growth, this company is still flying under the radar of Wall Street. For the name and details on this company, click here to access our new special free report.

Dan Dzombak has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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