The long-awaited market corrections appears to be starting. Let’s just hope it’s a mild one. Nothing goes up forever. No-hitters in baseball are rare. Nobody bats 1.000, either, except in their first at-bat.
Check the indexes. Looks as if the Nasdaq has seriously outperformed the DOW in the past two years, but its downturn over the past couple of days also appears to be sharper.
OTOH, look back several years. From 1998, for example, the Nasdaq went out of sight compared to the other two guys. It then moved way below them for several years, and now is just at 1/4 of its 2000 high. Meanwhile, the other two guys, more or less acting together, are back almost to their all-time highs.
Or, better yet, look at the indexes starting with the year 2000. A real eye-opener. We’re seeing a lost decade for the buy-and-hold people. EXCEPT – if you sold big losers, and continued to hold steady dividend payers, you’re probably better off than you were before.
It’s long-term trends we’re after. Is a company you are interested in under-performing or out-performing the market it plays in? I.e., if it’s traded on the New York Stock Exchange, how does it perform compared to the Dow? How does it perform compared to its peers?
Compare performance charts until you are blue in the face. Those lines jump right out at you.
Oh, and that asset allocation you have read about? Check again. Yep, gold and silver going down, even as stock market is going down. Dollar has been dropping for a year [see our Swatch Index, now published here on Fridays.] So much for the inflation hedge.