The Ten Year Treasury....ended up at a yield of.....1.351%. Amazing. I guess anyone that got all caught up in the DRAMA 2-4 months ago about how the yields were going to go up like crazy.......may have made some wrong moves. A telling lessen in following the short term financial media.....BS.
I guess the alternate headline to this little article could be......"Stock Traders give Jeff Bezos the finger as he goes out the door". Amazon Gains Nearly 4% As Traders Welcome New CEO Jassy https://finance.yahoo.com/news/amazon-gains-nearly-4-traders-112342234.html (BOLD is my opinion OR what I consider important content) "Investing.com – Amazon (NASDAQ:AMZN) rose more than 3.5% during Tuesday’s trading on high hopes for the company’s new president and CEO Andrew R. Jassy, a veteran at the cloud-computing and retail giant. Andy Jassy, as he is usually called, took over from Amazon’s iconic founder Jeff Bezos on Monday. Jassy, a 53-year-old MBA from Harvard, joined Amazon in 1997 as a marketing manager. Before taking over his current role, Jassy headed Amazon Web Services, the cloud services unit of the company that he had also helped create. AWS made an operating profit of $13.5 billion on revenue of $45 billion last year. In connection with Jassy’s promotion, the company has approved giving him 61,000 shares of its common stock. The shares will vest over 10 years. He has also been provided security. The shares are worth $222 million as per the current price of $3,640.95. A WSJ profile of Jassy described him as “as soft-spoken and approachable in a way that some say Mr. Bezos isn’t."" MY COMMENT Soft spoken may be good as long as he is.....decisive, and a leader. All touchy-freely is often NOT a good thing for a LEADER. Time will tell if he is up to the job. Amazon is a huge CONGLOMERATE.....not just a tech company......it will take a very decisive and broad thinking leader to be successful with the company. At least....he has many many years with the company. I would give him 50/50 odds at best of being able to run this company. Another alternative headline might be......."Instead Of A Gold Watch, They Gave Him The Finger"
I continue to....as an investor.....to thumb my nose at all the talk of interest rates and inflation and the FED. WHATEVER. The KEY factors going forward for the markets will be....EARNINGS and the RE-OPENING....nothing more nothing less. The KEY possible negative factors will be.......GOVERNMENT actions, taxes, and regulation.
I've come to the conclusion that macro factor news items and macro factors have absolutely no relation.
For anyone like myself who owns both MSFT and AMZN.....this is a potential HUGE win for both companies. Microsoft and Amazon could both come out on top now that Project JEDI is dead https://finance.yahoo.com/news/micr...-now-that-project-jedi-is-dead-194243402.html (BOLD is my opinion OR what I consider important content) "Microsoft (MSFT) suffered a seemingly serious blow to its future earnings on Tuesday when the Department of Defense announced that it is killing off its controversial Joint Enterprise Defense Infrastructure, or JEDI, cloud-computing project. But it's not the end for Microsoft's connected defense ambitions. The initiative was expected to drag the DoD’s computing platforms into the 21st century by consolidating them into a single entity. The idea was to ensure everyone from DoD employees in the U.S. to soldiers on the frontline could access and manipulate data and support innovations in artificial intelligence at the speed of modern enterprises. Microsoft initially won the contract in 2019, giving its cloud platform, the second largest in the world, a massive win over market leader Amazon. But the deal was fraught with issues including accusations of interference by then-President Donald Trump — who expresses disdain for Amazon (AMZN) founder Jeff Bezos — and worries about a single company controlling the government’s entire cloud platform. It’s not all doom and gloom for Microsoft, though. The company now has the option to bid on JEDI’s replacement, the Joint Warfighter Cloud Capability initiative, a multi-cloud project that could see Microsoft and Amazon win the contract together. A potential win for both Microsoft and Amazon In a statement announcing the end of JEDI, the DoD more or less lays out that Microsoft and Amazon are still its top contenders for the JWCC contract. “The Joint Warfighter Cloud Capability (JWCC) will be a multi-cloud/multi-vendor Indefinite Delivery-Indefinite Quantity (IDIQ) contract,” the statement reads. “The Department intends to seek proposals from a limited number of sources, namely the Microsoft Corporation (Microsoft) and Amazon Web Services (AWS), as available market research indicates that these two vendors are the only Cloud Service Providers (CSPs) capable of meeting the Department’s requirements.” The fact that the initiative’s contract is listed for an indefinite delivery and indefinite quantity means that it could stretch beyond the $10 billion of JEDI, which would benefit the two tech giants. So while Microsoft would certainly like to know it’s got a $10 billion contract with the DoD under its belt, the knowledge that it’s almost guaranteed to at least share the JWCC contract with Amazon should offer some relief. Project JEDI has been controversial for years Project JEDI was plagued with controversy since it was announced in 2018 — with cybersecurity experts like NYU Tandon School of Engineering professor Justin Cappos pointing to the dangers of the DoD relying on a single cloud vendor, a relative rarity even in the enterprise space. The reason using a single vendor is so controversial? It’s simply safer to use multiple cloud vendors. Think of it this way: If a single cloud vendor is hit with a cyberattack and can’t provide the services the DoD needs, the Pentagon is out of luck. But its operations can continue if it can rely on a backup provider. In fact, Microsoft’s then general manager of national security Leigh Madden said as much during a 2018 interview with TechCrunch, telling the publication, “it’s counter to what we are seeing across the globe where 80% of customers are adopting a multi-cloud solution.” Microsoft didn’t even start work on the project The DoD released its final request for proposal (RFP) for JEDI in July 2018, after receiving 1,500 comments and questions on previous RFPs. While Amazon was considered a shoo-in for the project because of its massive cloud business, it was not Microsoft’s only competition. Oracle (ORCL) and IBM (IBM), which are also players in the cloud market, were among a number of firms vying for JEDI's $10 billion contract. In the end, though, Amazon and Microsoft, which have a slew of data centers stationed throughout the world, and a history of working with the government, came in as the two finalists, the Pentagon said in April. When Microsoft won the contract in 2019, Amazon filed suit alleging the Trump administration interfered with the award process. The thinking from Amazon was that Trump had a bone to pick with then-Amazon CEO Bezos, who owns the Washington Post — a paper that had scrutinized the Trump administration. An investigation by the DoD’s Inspector General, however, found the Trump administration had not interfered with the process. Still, Amazon sought to fight the award to Microsoft, and won a restraining order blocking the Windows maker from beginning work on the project. Amazon’s legal fight picked up steam in April when Amazon beat out a motion to dismiss its case. That left the JEDI’s existence up in the air, raising questions about whether the DoD would continue to slog through court fight after court fight to maintain the project. "We understand and agree with the DoD’s decision," an Amazon spokesperson said in a statement. "Unfortunately, the contract award was not based on the merits of the proposals and instead was the result of outside influence that has no place in government procurement."" MY COMMENT HOPEFULLY a good WIN for both companies. It makes TOTAL sense for the government to use BOTH companies. PLUS using both will spread the wealth around to the two leading companies from the USA. Of course assuming that GOVERNMENT.....will....do anything that is rational or logical is always a BIG......."IF". If both companies get this contract it will be BIG BUCKS in the bank for them going forward.
Looks like this is the reason for the PANIC in the DOW today. Just....typical...short term "stuff". My view is we are RIPE for a nice....bounce back....tomorrow....and.....a continuation of the RALLY in the NASDAQ and the TECH GIANTS that we saw today. In other words.....a continuation of the little SUMMER STEALTH RALLY that we have been in for at least a month now. Dow Jones Futures Fall: Amazon, Shopify Lead 5 Techs In Buy Zones; Tesla Falls As China, Energy Stocks Hit Hard https://www.investors.com/market-tr...alls-china-energy-stocks-hit-hard/?src=A00220 (BOLD is my opinion OR what I consider important content) "Dow Jones futures fell slightly late Tuesday, along with S&P 500 futures and Nasdaq futures. The stock market rally suffered loses as crude oil prices and other commodity futures retreated while Treasury yields slumped to a fresh four-month lows. Software and some tech megacaps continued to lead. CrowdStrike (CRWD), Zscaler (ZS), Shopify (SHOP), Bill.com (BILL) and Amazon.com (AMZN) broke out. A widespread ransomware attack gave a boost to the cybersecurity plays such as CrowdStrike and ZS stock. The Pentagon canceled a $10 billion JEDI cloud-computing contract with Microsoft (MSFT), a likely win for Amazon. China Stocks Slammed China stocks were hard hit as Beijing extended a crackdown on ride-hailing giant Didi Global (DIDI) and two other recent U.S. IPOs, logistics platform Full Truck Alliance (YMM) and jobs-search app Kanzhun (BZ). That raised regulatory risk concerns for U.S.-listed Chinese companies, especially those like Didi that rely on user data. DIDI stock plunged nearly 20% to 12.49, while YMM lost 6.7% and BZ 16%, all undercutting their IPO prices, at least intraday. Alibaba (BABA), which paid a record antitrust fine earlier this year, slumped 2.8%, near a 52-week low. Tencent (TCEHY) retreated 3.45% to its worst levels of the year. UP Fintech (TIGR) plunged 14%. Energy stocks dominated Tuesday's biggest losers in the S&P 500 index. U.S. crude futures hit a six-year high overnight of $76.98 a barrel following an OPEC+ impasse, but closed Tuesday down 2.4% to $73.37 a barrel. Like crude oil prices, energy stocks have run up sharply in 2021. Most still look in good technical health, though few are in good buying positions right now. Miners also retreated as copper turned lower, while agriculture stocks slumped as crop futures sold off. Tumbling 10-year Treasury yields hit financials. Meanwhile, Tesla (TSLA) retreated 2.85% to 659.58, a relatively large drop for a non-China, non-energy stock. That could reflect Beijing's ire vs. the electric vehicle giant, while the New York Times ran a front-page story on a lawsuit vs. Tesla over an Autopilot-related death of a 15-year boy in another car. TSLA stock is now below a recent consolidation formed after moving above its 50-day line and downward-sloping trend line in late June. Shares are close to testing that trend line as well as its 50-day line, which is about to converge with the 200-day average. At this point, investors looking for an early entry in TSLA stock might target last Friday's intraday high of 700." MY COMMENT YES.....typical short term "stuff". At least we seem to be done with all the BITCOIN articles and financial commentary....at least for a while. Get in bed with CHINA......and you are likely to end up with a knife sticking out of your back....both companies, and investors. We need to do everything we can......as a country....to STRONGLY ENCOURAGE....our corporations to get out of that country and move to the other ASIAN countries or INDIA. Not that I think there is any chance this will happen. For some reason our business leaders are SMITTEN with China. India seems like a far better bet to me....just as big of a market.....and a good worker pool.
I have been on a REALLY nice run lately in my primary account. New high, after, new high. I am sure many people on this board are seeing the same. These results are beginning to add up. The SP500 is year to date.....as of today.....+15.64%. I am now, year to date.....as of today......+16.60%. I have no ILLUSIONS that I have been doing anything other than riding the wave......since I dont do anything on a daily basis other than sit and watch the markets go by. The POWER.....of passive......long term investing. Pick good stocks....or buy an Index....and sit and watch. I also have no ILLUSIONS that my recent gains will.....or.....will not hold. Who knows. Earlier in the year......I was significantly ahead of the SP500.......when the big cap tech stocks went out of favor, I fell behind the average. I have HIGH hopes for the upcoming earnings....but....no expectation that the short term markets will reward the companies that post great results. They will be NIT-PICKED as usual.
I am VERY Happy with myt 12.69% YTD compared to 2019 pre-covid 1.60% returns I was getting on my Credit union savings account with that same batch of cash!
That is GREAT.....Dogtown. Being at 12.69% versus your savings account return of 1.60% is an AMAZING difference. Personally I have said many times on here......my primary GOAL.......as a long term investor is to average a return of 10% or more over the long term. That will double my money every 7.2 years. Being REALISTIC in investing goals avoids.......GREED.......and all the negative things that happen to investors due to GREED. Where you are right now....if it stands till year end.....you would double your money every .....5.7 years. Do that over the long term and you are talking about the CREATION of WEALTH. CONGRATULATIONS.
A BIT more detail on my little NVIDIA play. Initially on May 21, 2021...when the split was announced...I bought 30 shares with funds from my SP500 Index fund......at $599....to play the split. As the gains piled up....I decided that I should be on leverage. SO.....on June 9, 2021......I sold 26 of my 30 shares....at $700..... to pay back the SP500 Index fund.....keeping four shares as profit. On the same day.....June 9, 2021......I bought on MARGIN.....35 shares at $700. Those shares are now at $828 per share for a profit.....on paper of $4480. SO....at the moment.....I have 4 shares....representing profit.......and the $4480 would give me another 5.4 shares of profit. With approximately 10 shares of profit.....that would translate into 40 shares post split. My goal in this little play was to end up with 50.....or more....shares profit....post split. I will....probably sell enough of the 35 shares a day or two after the split to pay back my MARGIN balance. The post split shares that I have as profit at that point will JOIN my long term NVIDIA holding. I have ZERO plans to sell any of my long term NVIDIA shares. TOMORROW....is day 9 of the final count-down. the split happens after the close on July 19.....and....the newly split shares will begin trading on July 20. The split is 4 for 1.
Dog , I'll give that a double thumbs up , CONGRATS !! The way I see it is the EASY MONEY is pretty much gone, we are pretty much back to the same old grind it out market of pre-covid, I am very appreciative to this forum, it helped keep me sane during covid, and it has expanded my somewhat simple understanding of the market. by pushing me too do more on research on what I am investing in. I too am in the high teen return bracket for the YTD THANK YOU GUYS !!
I REALLY....dont see much REAL inflation going on right now. The ULTRA-LOW yield on the Ten Year Treasury.....which has dropped over the past weeks....indicates.....no inflation. Various commodities and other items are also dropping. I see supply/demand and shipping and transportation issues.....but....NO real inflation. My view is what we are seeing....WILL.....in fact be TRANSITORY.
YES......that is the point of this thread.....to support each other as investors. It does not matter where we are along the CONTINUUM of investing......we are ALL in the same boat. That is why....ANYONE....is welcome to post on this thread. There is VALUE in the experiences of EVERYONE.....no matter your style, ability, or experience. That is why I post what I am doing on here for ALL to see......the good....the bad.....and the ugly. It shows that everyone makes mistakes and no one is perfect. BUT....you do not have to be perfect.....there is good money to be made in just being human and average.....if you follow reason and rational investing strategies. ESPECIALLY.....for the LONG TERM. NEVER....underestimate the POWER of COMPOUNDING.....over the long term.
LOOKING forward to the market tomorrow.......the unknown of the short term makes the day interesting. Lets make some money tomorrow. Stock market news live updates: Stock futures open lower to extend declines https://finance.yahoo.com/news/stock-market-news-live-updates-july-7-2021-221336927.html (BOLD is my opinion OR what I consider important content) "Stock futures fell after a mixed session earlier in the day, which saw the S&P 500 and Dow pull back from record levels. Contracts on the S&P 500 dipped. The index pulled back by the end of the regular session Tuesday. However, this came following a notable run-up for the blue-chip index in recent weeks: It had closed at record highs at the end of each of the last seven sessions, and hit a record intraday high Tuesday morning. The Dow also dropped during Tuesday's session to pull back from Friday's record closing high, while the Nasdaq set a new record as shares of Apple (AAPL) ended at a six-month high and Amazon (AMZN) rallied. Shares of Didi Global (DIDI) steadied in late trading after shares sank 19% to close below their IPO price from last week, after Chinese regulators called for the removal of the ride-hailing service in app stores in the country. Meanwhile, U.S. crude oil prices retreated after briefly reaching their highest level since November 2014, after a breakdown in OPEC talks earlier this week yielded no agreement to add more output to the supply-constrained global energy markets. The sharp move lower after the rally came as some pundits speculated that some oil producers might begin to act alone to increase output. Others, however, were more skeptical. "This has been a long-time coming. [There's been] a lot of destruction in the energy patch here in the United States for the past three, four years. The pandemic kind of finished the job for most U.S. producers. OPEC really was in the driver's seat for most of this year," Dan Dicker, the Energy Word Founder, told Yahoo Finance. "With this country coming out of the pandemic so strongly and the rest of Europe and the rest of the world still to come out of the pandemic leads many traders to believe — and me to believe — we’re not done with the rally in crude oil." For equity investors, focus has centered on both the path forward for monetary policy – which has underpinned stocks' record rebound during the pandemic – and the pace of growth in corporate earnings. The Fed's June meeting minutes set for release Wednesday afternoon will help elucidate the central bank's thinking around when to tighten their currently ultra-accommodative monetary policies, from their crisis-era asset purchase program to near-zero benchmark interest rates. And next week, second-quarter corporate earnings results will kick off in earnest, showing the extent of the boost companies received following a major U.S. vaccination campaign and widespread reopenings. "The second half, honestly it's shaping up to be a continuation of what we've been seeing, but maybe a little moderation in these growth rates. If you look at earnings expectations for this quarter coming up, they're up about 60% year-over-year – earnings expectations have been absolutely soaring," Michael Antonelli, Baird PWM market strategist, told Yahoo Finance. "That rate will probably come down, but we can't be disappointed with that level of growth expectations and earnings. Forward PEs [price-earnings ratios] are still pretty high above 21. But I think honestly the second half is shaping up to be a continued reopening, continued expectations for better earnings, and a possible correction." "If you were to take any single year in history, you should expect about three 5% corrections and one 10% correction," he added. “We’ve had one 4% pullback. So, to me, the probability of another pullback … is high.”" MY COMMENT YES.....the second half of the year should be very nice. EARNINGS should drive the markets.....but as we continue to re-open....the third and fourth quarter earnings might MODERATE for some companies as they settle into a NORMAL business environment. In other words....a "normal" market by year end and into 2022 and beyond. AND....we will in all likelihood.....see one or more CORRECTIONS before the end of this year. No big deal.....just part of the normal market process. The corrections....set up the next market advance....sooner or later.
Since I am being FOCUSED and OBSESSIVE about NVIDIA...lately....this is a very nice article on the company and their future prospects. A lot of DETAIL in this article on the company, their products, and their business. I am not going to put the article up since it goes into way more detail than most people probably want to see. Bull of the Day: NVIDIA (NVDA) https://finance.yahoo.com/news/bull-day-nvidia-nvda-092009996.html "In my June 10 article on NVIDIA (NVDA), I explained why the stock was still undervalued at $700 because of the growth rate in its Datacenter business that was about to overtake its Gaming segment. In this report, I'll explain why this shift is so important and how innovations that investors have barely understood just ignited the recent explosion in the stock above $800........." (see the full article for more GREAT content)
Happy FED day. TYPICAL open today....and typical mid morning weakness. OMG......Inflation is SURGING.....RAMPAGING in FULL BEAST MODE through the economy!!!! Wait......NEVER MIND.....Ten Year Treasury yield has dropped......plummeted....to 1.30%. The Thirty Year has dropped to.....1.923%. Can you imagine locking up money for 30 years at 1.923%? Short exit stampede at 1.4% drives U.S. Treasury yield slump, traders say https://www.reuters.com/article/glo...reasury-yield-slump-traders-say-idUSL5N2OJ2OD (BOLD is my opinion OR what I consider important content) "LONDON (Reuters) - An unwinding of bets by some hedge funds against 10-year U.S. Treasuries, the world’s safest asset, explains the sudden ructions in bond markets, traders and fund managers told Reuters on Wednesday. Yields on 10-year Treasuries fell below 1.40% in New York trading on Tuesday and rapidly fell to a near five-month low in early London trading of 1.33% before stabilising around 1.34%. They are now more than 40 bps below a January 2020 high of 1.77% hit in March. That painted a gloomy picture in the popular “reflation” trade on stocks that do well in a rising rates environment, and the bets against U.S. Treasuries turned sour. The change was also attributed partly to fears of another deadly COVID-19 wave. One trader at a European bank said the move was fuelled by the drop in U.S. Treasury yields below the 1.40% level as many funds had hedged some of their wider reflation bets by putting stop-loss orders at that level. Stop-loss orders are essentially trades where investors hedge their broader market trades by taking an opposite position to trim losses in case markets move against them. Another trader saw the move as technical, saying U.S. Treasury yields were a variation of the popular “death cross” in financial markets, where short-term moving averages (50-day) intersect with longer-term averages (100-day) pointing to lower yields. The ‘long duration’ quality of tech and ‘growth’ stocks becomes attractive again with yields under pressure. Nasdaq futures were heading towards yet another record high on Wednesday. “There was a spike around the 1.38-1.40 area and getting through that triggered some stops (stop losses),” said Charles Diebel, head of fixed income at Mediolanum International Funds. “When it got to those levels, people who were short were feeling uncomfortable and started selling.” Net bearish bets on 10-year Treasury futures jumped to 59,960 contracts for the week ended June 29, according to the Commodity Futures Trading Commission. Daily turnover on the front-month 10-year U.S. Treasury futures was nearly 2 million contracts, the largest since May 26 but less than half of 2021’s peak of more than 4 million in late February, according to Refinitiv data. The move rippled across the yield curve and caught broader markets by surprise, with the high-flying Australian dollar weakening sharply. Though yields were under pressure for the last few weeks, the move lower accelerated after they began July at below 1.50%. The seasonal summer lull in financial markets are also a reason for outsized moves, said one fund manager who declined to be named. He said the moves in U.S. debt were triggered by hedge funds, though the size of the trades were not “massive”. Apart from positioning and technicals, the recent spread of the Delta COVID-19 variant and weak U.S. services activity data also weighed on investor sentiment, prompting them to seek safety in U.S. Treasuries. “This is likely a shift in market narrative: away from inflation concerns to concerns about the sustainability of growth momentum, and you see that in pretty much every market,” said Vasileios Gkionakis, head of FX strategy at Banque Lombard Odier & Cie SA. Graphic: The tech-yield connection: only getting stronger - Graphic: US yields - Reporting by Sujata Rao and Saikat Chatterjee; Editing by Thyagaraju Adinarayan and Gareth Jones" MY COMMENT HERE is the KEY statement: "This is likely a shift in market narrative: away from inflation concerns to concerns about the sustainability of growth momentum, and you see that in pretty much every market," Can you say.....DEFLATION? This is the REAL danger to the world economy and our economy. This is what has been happening in the EU and around the world for many years now. YES......there is no inflation. AND.....in spite of what you see in the financial media.....MOST....of the erratic day to day and short term movement you see in rates and yields is nothing more than MANIPULATION by short term professional traders and the media sources that they manipulate and use to try to move their trades.
OH NO....more bad news....NVIDIA is down by $7.32.....at this very moment. At least ALL the rest of the BIG CAP monster growth stocks are UP at the moment. The MAGNIFICENT FIVE are at it again today....so far......MSFT, AAPL, AMSN, FB, and GOOGL.....all UP. I happen to own four of the five. I have ZERO interest in owning FB.
A NEW Technical Indicator? For some reason today.....ALL...of my holdings that are in the RED begin with the letter "N".......NIKE and NVIDIA. At the moment all my other holdings are in the green. I will take it.....a good open to the day.
HERE is the TRUTH.......a definite MANTRA for long term investors and those trying to capture and catapult their wealth by using the power of compounding. Don't Miss the Best Days in the Markets Running for safety when market corrections occur can be costly. https://money.usnews.com/money/blog...ticles/dont-miss-the-best-days-in-the-markets (BOLD is my opinion OR what I consider important content) "Volatility in the markets has increased this recently, causing many investors to question their holdings. Questions commonly asked include whether investors should rebalance their portfolios, sell out of their positions or even move entirely to cash. If you're wondering how to approach your investments, it's important to understand market movements, how they impact certain investments and what that means for your portfolio. Sector Rotation This year, leadership within the equity markets has changed. In recent years, technology companies have been some of the best-performing stocks. These include Facebook (ticker: FB), Amazon.com (AMZN), Apple (AAPL), Netflix (NFLX), Alphabet (GOOG, GOOGL) and Microsoft Corp. (MSFT). But this year, that group of stocks has often lagged the performance of the S&P 500 index. Many of the top-performing stocks are not from the technology sector and include companies such as Marathon Oil Corp. (MRO), Nucor Corp. (NUE) and Ford Motor Co. (F). This aligns with the sector rotation that has occurred in 2021 where energy, finance and industrials have outperformed technology and utilities. This year, the Energy Select Sector SPDR ETF (XLE) has posted gains of about 45% year to date, a reversal of last year's performance when the index lost 32.5%. In contrast, the Technology Select Sector SPDR ETF (XLK) gained more than 40% last year but has only managed a 13% gain year to date. Rotation is normal in the markets. Seldom do you see an asset class consistently be the top performer. For example, the large-cap growth asset class, which includes Big Tech stocks, was the top-performing asset class in 2019 and 2020. But this year, it is underperforming when compared to both small-cap companies and the large value assets. Suggesting that this time is different generally goes against historical trends and sparks the question: Should an investor anticipate underperformance in the technology sector for an extended period? Diversifying a portfolio provides exposure to multiple asset classes and can benefit an investor when the top-performing asset classes vary from year to year. Don't Miss the Best Days in the Stock Market It may be easy to forget, but many of the largest single-day gains in the U.S. equity markets occurred in 2020 during the coronavirus pandemic. Last March and April, the Dow Jones Industrial Average recorded six of its seven largest single-day gains ever. But when many people think back to March 2020, they remember the losses that occurred in the markets. Investors who moved to the sidelines and waited for clarity before reinvesting missed out on some of the best days ever in the equity markets. Historically, waiting for market clarity to reinvest is a mistake as investors miss the days when the largest rebounds occur. These large rebounds typically occur during periods of stress, not when expectations are high. If one excludes last March, the largest single-day gains in the Dow Jones Industrial Average occurred on Dec. 26, 2018 and Jan. 4, 2019. Back then, the DJIA was at the end of a double-digit percentage correction, similar to the correction from last year. Again, those who sought clarity before reinvesting missed out on some of the biggest gains ever in the stock market. Research by First Trust shows that the opportunity cost of missing the best days in U.S. equity markets can be quite large. If investors missed the best 30 days of the S&P 500 index between Dec. 31, 1979 and Dec. 31, 2020, they would have realized only 16% of the total upside performance during this extended period. That is a significant missed opportunity. Overcoming Fear Fear comes in many ways, but too often, it drives investors out of the markets. It can be fear of change, such as those related to interest rates, the political landscape or tax laws. It can also be fear of the unknown, which stems from a lack of control or reliance on another person's decisions. Letting fear control investment decisions can often drive investors out of the equity markets and may prevent them from participating in the largest single-day gains and realizing substantial long-term returns. Takeaway Waiting for clarity before investing may be a mistake. Markets normally focus on expected outcomes that are weeks, months or years ahead. In constrast, the common investor tends to look at the immediate outlook, which can be clouded by short-lived developments and outside influences. Market corrections are a normal occurrence and are often followed by some of the best days in the markets. Failure to stay invested during these days may prove to be a missed opportunity." MY COMMENT THIS is EXACTLY why I stay fully invested all the time for the long term. I want to capture ALL the gains.....and there is absolutely no way to tell over the short term when they will happen. ADD in the FACT that the market direction is historically UP and the fact that the general business direction......shown by the FACT that the SP500 is POSITIVE about 70% of ALL years.....and you have a simple reason to NOT try to time the markets. I mentioned in a post above that there WILL probably be one or two corrections this year.....in fact they happen just about EVERY year. There is no way to anticipate when they will start and when they will end. So......I just sit and wait......as usual....when they happen. They are just short term market CHAFF.
