ETFyourself.com: Sunday Edition
Chart of the week, performance updates and more
Performance That Matters
When I debuted this table last week, the year to date return for FNGS, the Magnificent Seven Nasdaq stocks plus a few more like them, was flying in 2024. What a difference a week makes, topped off by the 10% drop in Nvidia on Friday. Result: FNGS now up 6% for the year, off a peak of +18% not long ago.
Lesson: past performance can be deceiving, and the more we chase it “just because it went up,” the more we are flying blind. That’s one reason I do what I do, and communicate these ongoing educational points. Because I continue to see too many investors chasing performance, rather than doing research.
But this is not simply a Nasdaq problem brewing. As shown in yellow, the average S&P 500 stock (RSP) is now only up 1.7% YTD and when we add in the next-largest 500 stocks (EQAL), the average stock is down 0.8%.
Looking back further (blue highlights), an asset allocation portfolio, ranging from conservative to aggressive, continues to be in a rut that is now more than 4 years old. A conservative mix of 30% stocks/70% bonds is up only 1.4% since the pandemic peak in early 2020. This is why I tend not to use terms like “bull market” or “bear market.” It is a low return market with lots of volatility, but people fool themselves when they listen to folks on TV or on social media touting big returns.
Lesson: put it all in context. That’s what this table aims to do: provide context.
FINAL NOTE FOR NOW: after a week like this, when many trends were broken, I strongly encourage ETFYourself.com subscribers to re-visit our recent issues, which are all currently on the site’s homepage, published on April 14, 16, and 18. Here is the chart of the S&P 500 I posted last Sunday, not the first time I’ve tried to get our subscribers out in front of what appeared to me to be a high-risk stock market, driven in large part by rising interest rates and excessive optimism.
Again, I do not care which direction the markets go. My goal is to make money as consistently as possible, and the #1 way to do that is by learning how to play defense, a skill many investors never learn...because no one has a vested interest in teaching it to them. I’m teaching it at ETFYourself.com and through our Sungarden Institutional service.
Source for all data: Ycharts
Rob Isbitts on etf.com
You can see my full history of articles for etf.com on my author page here.
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