Owning only the S&P 500 is not "diversification". Sure, you own 500 different stocks in a single fund, so you're diversified within the sections of the stock market covered by the S&P, but not beyond that! You also need to own other sections of the stock market, such as small and international stocks. Historically, these different areas have outperformed each other in very long-term cycles. Owning them all will produce more consistent returns over time and reduce the risk of underperforming during a cycle where a single index is producing poor returns.
Zachary Lopez, CFP®,CBDA’s Post
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Sydney | Los Angeles | TED Presenter | Investment Management | Wealth Management | Finance
The McClellan Oscillator (MO) is a tool which analyses the difference between the number of stocks advancing and declining on a stock exchange, such as the NYSE or ASX (source: McClellan Financial, 2024). Put simply, it measures the number of stocks going up or down at any one time. The MO posits that a change of 100 points or more could indicate a strong reversal is coming (source: McClellan Financial, 2024). Since May 2024, the MO went from negative 100 to positive 50 following the April 2024 drawdown and subsequent reversal when you apply the tool against the S&P500. This is a rare occurrence. If history repeats, the recent advancements in equity markets has a high probability of reversing any time from now to 60 days post the MO exceeding 100 points (see: 2002, 2008, amongst others) (source, GOT, 2024). Indeed, tools and models are not perfect though will history repeat this time, too? Follow me for daily short financial updates.
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The small-cap breakout over the past week is a perfect example of why you remain diversified beyond the S&P 500. Yes, the S&P is generally where the plurality of your stock portfolio should be concentrated, but it is also not representative of the entire stock market. You want to own a broad, diversified mix of stocks, not just the big guys.
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The McClellan Oscillator (MO) is a tool which analyses the difference between the number of stocks advancing and declining on a stock exchange, such as the NYSE or ASX (source: McClellan Financial, 2024). Put simply, it measures the number of stocks going up or down at any one time. The MO posits that a change of 100 points or more could indicate a strong reversal is coming (source: McClellan Financial, 2024). Since May 2024, the MO went from negative 100 to positive 50 following the April 2024 drawdown and subsequent reversal when you apply the tool against the S&P500. This is a rare occurrence. If history repeats, the recent advancements in equity markets has a high probability of reversing any time from now to 60 days post the MO exceeding 100 points (see: 2002, 2008, amongst others) (source, GOT, 2024). Indeed, tools and models are not perfect though will history repeat this time, too? Follow me for daily short financial updates.
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Here's what old people do on the first day of 2025 😊 Performance of top 25 capitalised stocks in S&P500. Overall the S&P500 was up 23.3% on the year - off it's best levels. Compare these performances with the chart I posted yesterday on JSE. The trend is likely to persist into 2025, obviously not at the same pace.
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FOLLOW THE TREND The trend of stock prices remains higher and many securities firms have raised their price targets for this year- some (Evercore for example) raising their price target 10% higher from present levels. This should not be surprising for most as the October 2023 lows represented a definite change in trend higher for stock prices. While past results are not indicative of future results, two articles last week pointed out that it pays to stick with the trend: . Ryan Detrick, CMT: "Can this rally continue? Be aware that July has been up 9 years in a row for the S&P 500. Over the past decade? Higher 90% of the time and up 3.1% on average." . Bloomberg News: " Since 1980, the S&P 500 has never peaked in June." Long term stock investors especially those in 401(k) plans with time until their retirement-stick with the long term trend even though a "correction" in prices of 5%-10% is long overdue. Shorter term investors: "The trend is your friend" (Alan Shaw, Chief Market Technician Smith Barney. 1983) until a decline reaches your level of risk or your time horizon changes.
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Using dividend-paying stocks as a core holding can lead to one significant challenge: performance discrepancies vs. major benchmarks. Here’s how to grow dividend payouts over time without significantly lagging the market.
The Dividend Dilemma (Hartford Funds)
hartfordfunds.com
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Using dividend-paying stocks as a core holding can lead to one significant challenge: performance discrepancies vs. major benchmarks. Here’s how to grow dividend payouts over time without significantly lagging the market.
The Dividend Dilemma (Hartford Funds)
hartfordfunds.com
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Current Updates on the Stock Market Today Learn More: https://lnkd.in/gS4sS49z #StockMarketNews #BusinessNews #NSE #BSE #Updates
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The S&P 500 is up nearly 30% this year How rare is a 30%+ gain? It's happened 18 times in the past 96 years (1 out of every 5 years) The S&P has been up 25% or more in 1 out of every 4 years Large gains in the stock market are normal https://lnkd.in/gmGnFXsX
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