FYI: Two thousand nineteen isn’t even a third over and it’s already shaping up as a great year for the financial markets. The S&P 500 index and the Nasdaq Composite both ended the week at record highs, a big reason that global equity markets have gained $10 trillion in value since the turn of the year, with global credit markets kicking in another $2 trillion to investors’ wealth, by the reckoning of Torsten Slok, chief economist at Deutsche Bank Securities.
At the risk of propounding American exceptionalism, U.S. markets have handily outdistanced the rest of the world. Using exchange-traded funds to illustrate, the SPDR S&P 500 ETF (ticker: SPY) posted a total return (including dividends) of 16.73% for the year through Thursday, according to fund tracker Morningstar’s data. The Invesco QQQ Trust (QQQ), which tracks the biggest stocks in the tech-heavy Nasdaq, returned 23.7%. Venturing abroad paid less well. The iShares MSCI EAFE ETF (EFA), which tracks the major non-U.S. developed markets, returned 12.59%, while the iShares MSCI Emerging Markets ETF (EEM) returned 11.9%.
Regards,
Ted
https://www.barrons.com/articles/intel-and-3m-are-among-the-losers-in-this-record-setting-market-51556325767
Comments
Derf
@Derf- Do you know where that particular saying comes from? (Maybe I should ask "Are you old enough to know...")
Have a pleasant Sunday, Derf
Read virtually any respectable financial publication from Barrons to the MFO Monthly Commentaries over the past 8-10 years and you’ll find warnings about overvaluation, lofty levels, dangerous markets, overbought markets, over exuberance, etc.. Yet, had you heeded those warnings 3, 5 or 8 years ago and moved to ultra-safe investments like cash and limited duration bonds you’d likely have been left standing in the dust along the road as markets marched higher.
Does this make me optimistic going forward? No - not in the least. But something isn’t adding up when you compare the decade old flood of warnings about valuations alongside actual U.S. stock market performance over the same period. One possibility (but only a possibility) for those fixated on indexes is that the 10-year steady march higher since 2009 will eventually be erased by a sudden, rapid, downward spiral in valuations. Let’s hope that doesn’t happen. Should it occur, however, it might make the roughly 18 months slide from late ‘07 to early ‘09 look like a Sunday picnic.*
I don’t get paid to give investment advice here, so offer none.
*From its peak in 2007 to its low in 2009, The S&P 500 Index fell roughly 50%.
https://www.frbatlanta.org/cenfis/publications/notesfromthevault/0909
Agree, with @hank
There has been an uptick relative to the large whack of Dec. 2018, and those doing dollar cost averaging via 401k, etc. should do okay going forward.
However, I do review/watch what is shown in the below chart.
The chart starts at about the first trading day of 2018; and I use SPY and ITOT to generally look at U.S. large cap, although ITOT has some mid/sm. cap. The NYSE reference is more broad based U.S. cap sizes. The IXUS is global and doesn't include U.S.
NOTES: ITOT is about 80% large cap and contains about 3,300 holdings. IXUS is about evenly split between Asia and Europe regions representing 88% of the 3,200 holdings.
>>>Indeed, there remain some decent sectors returns, as well as those drifting about.
Much of the "up" bump in some etf's and active funds can thank the broad tech. sector and whatever the percentage inclusion may be in a given fund for some of the gain.
Many bond styles remain fairly strong at this time, as well. The 1 year Treasury currently has a higher yield than the 30 year.
IMHO, a lot of varying opinions must be in place to find the equity and bond worlds in their current state.
Chart
Some place in there people began using "The fat lady hasn't sung" to mean that something wasn't over yet, with a joking reference to Kate Smith. By the way, since that whole image is currently politically very incorrect, you won't find that particular explanation in the Wickipedia version.
Derf
Hank well put. Instead of posting what are you buying , selling , or caught in the headlights. I went in a different direction somewhat.
I realize most followers here have different approaches to investing, different strokes for different folks!!
Anyhow the comments were appreciated.
Good investing to all, Derf
'till the fat lady sings' is usually understood to come from opera, in particular brunnhilde at the end of wagner's twilight of the gods, long before kate smith
https://www.phrases.org.uk/meanings/it-aint-over-until-the-fat-lady-sings.html
the Kate one is by far weakest, as it says, on account of sense
no one mentions Groucho, I see
So if you are doing well/near retirement and thinking time to bail out, extremely happy w previous 10+years profit then maybe best time to get out..
I reduced mother portfolio to 30%equities and 70% bonds fixed-income recently
“The Dow Jones Industrial Average's highest closing record is 26,828.39, set on October 3, 2018. It followed a record set the previous day.” https://www.thebalance.com/dow-jones-closing-history-top-highs-and-lows-since-1929-3306174. On Friday the DJI closed 26,542. That put it 287 points below where it was roughly 6 months earlier. Call it an uptick if you like. For anyone with longer than a 6 months time horizon, the market, as measured by the DJI, is still in recovery mode following the late 2018 selloff.
Massive downward spirals in markets are exceedingly rare. I’m aware of only 2 in this country during the past 90 years that reached or exceeded the 50% range (‘29-‘32 and ‘07-‘09). In addition, Japan’s Nikkei may be worth a look. In 1989 that index, in a developed market with an economy second only to the U.S. at the time, peaked at 38,916. 30 years later it rests at 22,259.
No intent by me to shape anyone’s views one way or another. My recent shift to a static allocation model with only occasional rebalancing has distanced me from the daily / seasonal market gyrations. It’s more boring, potentially less profitable, but also reduces the danger of shooting myself in the foot.