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Economy
The stock market hasn't started a year this strongly since 1987 ‐ uh-oh!
2019-01-19
[Market Watch] Much has been made about the performance of stocks so far in 2019.

Small-cap stocks, as gauged by the Russell 2000 index RUT, +1.04% , are off to their best start to any year in the past 32 years, boasting a gain of 8.8% over the past 12 trading sessions, according to Dow Jones Market Data. That’s outpacing the large-cap S&P 500 SPX, +1.32% the U.S. stock-market benchmark, which is up 5.2% over the same stretch ‐ a performance, however, that likewise is the strongest 12-day start to a calendar year in 32 years.

The Dow Jones Industrial Average DJIA, +1.38% is up 4.5% over the same period, while the Nasdaq Composite Index COMP, +1.03% has logged a 6.8% advance.

Is it a reason to cheer? Perhaps it would be if not for the fact that the gains are the strongest since 1987, when the Russell popped 11.87% over the first 12 trading days and the S&P rallied 11.22%. 1987 is a year that lives in infamy on Wall Street.
Posted by:Besoeker

#23  #21..2008 taught me the importance of selling....in 2007.
Posted by: Fester Lumumba8742   2019-01-19 18:59  

#22  "Is it a reason to cheer? Perhaps it would be if not for the fact that the gains are the strongest since 1987, when the Russell popped 11.87% over the first 12 trading days and the S&P rallied 11.22%."

Apparently when Trump is President even a strong stock market is a bad thing. Can't wait to see how they report the inevitable bear market.
Posted by: ruprecht   2019-01-19 18:44  

#21  2008 taught me: Have a Pie Chart, not a Pie. Diversify. REITS, etc.
Posted by: Frank G   2019-01-19 18:34  

#20  
GE,, In Dec 17 when it cut its dividend in half. NEVER hold on to a company when it cuts its dividend
Posted by: Fester Lumumba8742   2019-01-19 18:31  

#19  "Slope" rather than "scope".
Posted by: Percy Speaking for Boskone6553   2019-01-19 18:23  

#18  Buy / sell signals based on markets crossing moving averages have been a staple on Wall St. for a very long time now. IIRC the classic text written in the 1950s noted that selling the broad market when it fell below its 200-day moving average *and* when the moving average had negative scope and buying on the opposite signal had returned a percentage in the very high teens over a half century. Modern money managers will tell you those signals still work today. Rolling that strategy to short term T-bills on each sale would probably raise the total return to north of 20% (as would including dividends which the old analyses don't consider).
Posted by: Percy Speaking for Boskone6553   2019-01-19 18:22  

#17  #14, you can easily make it work. In 2012 Health care became the leading sector in the world. AMGN, PFE,MRK, and UNH all met your requirements and averaged a 105% return to the sell point in the summer of 2015. Tech was the leading sector in the world from Spring 2016 to the sell in October 2018. MSFT, CSCO, AGVO, met your req and averaged an 80% return. In Total, All Blue Chips, averaging 22% per year, including dividends from 2/2012 to 10/2018.
Posted by: Fester Lumumba8742   2019-01-19 18:21  

#16  .....if you are driving and see an accident happening in front of you, I guess you continue to drive into it.

Fester - Yes, General Electric (GE), the 'stock you buy and never sell'. And I'm still driving (head in hands). How did you know ?
Posted by: Besoeker   2019-01-19 17:51  

#15  #13...if you are driving and see an accident happening in front of you, I guess you continue to drive into it.
Posted by: Fester Lumumba8742   2019-01-19 17:44  

#14  Very good stuff at #12 and throughout this string. Rule of thumb for me, if it's not been paying an increasing dividend (even if only a penny) per year, for more than 10-15 even 20 years, leave it alone.

I'm not into price growth alone. No dividend, no buy, no exception. Precipitous drop in dividends go on my 'sell' list. Yes, I have been guilty to being wedded to some of them, but I also have other weaknesses.

Posted by: Besoeker   2019-01-19 17:11  

#13  Timing share transactions is for speculators not investors.
Posted by: Bright Pebbles   2019-01-19 15:35  

#12  Time to stop making excuses. The next step is to compare against each other, via stockcharts, the major sectors in the world financial markets. They include, consumer discretionary, consumer staples, technology, 10 year bonds, gold, emerging markets, etc. etc. Once you rank these asset classes against each other you can find which one is outperforming all the others. Example... between 2000- Jan 2013 Gold's total return outperformed the Sp500 600% to 13% or close to 45 to 1. Between 2000-2007 the Fidelity Real Estate fund, FRESX averaged 22% per year, outperformed the SP500 by 450%. The only way to have known to get into Real Estate in 2000 was by comparing asset classes weekly. Once you have your charts set up, it takes 15 minutes to review them every week. Once you start to understand what the information in the charts is telling you, and you maximize it in a way you are comfortable, the returns are very nice.
Posted by: Hupeagum Chomong5266   2019-01-19 14:20  

#11  In the end, if you work for someone else, you have to save for when you aren't working anymore. If you can save enough to retire you damn well better have somewhere better to put it than a savings account or a CD that earns a fraction of whatever inflation is. If you are smart enough to invest directly in a going concern, God bless you. Otherwise you have to buy equities and business backed debt.
Posted by: M. Murcek   2019-01-19 13:47  

#10  If you want to know when to get in and out...get an account at stockcharts.com..put in the symbol $nyhl..set the time period to daily and and the "type" to cumulative. Put an overlay "exp moving average" use a parameter of 126. This chart tells you when new net 52 week lows start to dominate the NYSE..which is usually a good time to get out.. It gave a sell signal in the autumn of 2007, and one last October 9. When the line goes positive it is time to get back in. If you use this (and some common sense) with Vanguard SP 500 fund and buy a 10 year Treasury fund when out of the market you could have added close to 2% per year since 1982 over a buy and hold strategy.
Posted by: Hupeagum Chomong5266   2019-01-19 13:17  

#9  For a great many people the stock market is the enemy of wealth generation.
Posted by: Anguper Hupomosing9418   2019-01-19 12:22  

#8  Diversification is the enemy of wealth generation. There are over 150 stocks that returned >20% on average per year over the last ten years. Many are in the SP500. Most people have the intelligence to learn how to find them but not the emotional control to hold and not sell. Go to stockcharts.com and start learning.
Posted by: Slolutle Cloluse3142   2019-01-19 11:57  

#7  The market gives everyone who takes the time (years) to learn the ability to AVERAGE 20% per year without breaking a sweat.

Mr. Madoff, Mr. Bernie Madoff to the white courtesy phone please. Mr. Madoff.
Posted by: Besoeker   2019-01-19 10:28  

#6  The market gives everyone who takes the time (years) to learn the ability to AVERAGE 20% per year without breaking a sweat.

To think that such nonsense could be written in the same week as the death of John Bogle boggles the mind.
Posted by: Mrs. Davis   2019-01-19 10:26  

#5  People who say it is rigged won’t take the time to learn how it is rigged. The market gives everyone who takes the time (years) to learn the ability to AVERAGE 20% per year without breaking a sweat.
Posted by: Slolutle Cloluse3142   2019-01-19 09:12  

#4  Thegovernmental organizations established to overwatch and throttle destructive speculation

As is evidenced by 'sell-offs' every time the Federal Reserve threatens to puts it finger on the scale.
Posted by: Besoeker   2019-01-19 08:10  

#3  ...pretty much. It's all speculation. The governmental organizations established to overwatch and throttle destructive speculation has largely been compromised and institutionally captured by those gaming the market. If you are a small investor in the market - Welcome to Vegas, baby!
Posted by: Procopius2k   2019-01-19 08:06  

#2  It's a rigged game.

For the small-time, individual investor it certainly is. As interest rates on CD's slowly rise, I suspect you'll see fewer people entering the market.
Posted by: Besoeker   2019-01-19 08:05  

#1  I don't have much faith in the stock market after the 2008 debacle. It's a rigged game.
Posted by: JohnQC   2019-01-19 08:01  

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