Posts filed under “Investing”

DJIA 1966 – 1982

The previous chart reveals the long standing secular moves of the markets; What’s an investor to do during one of the long periods of weakness?

One answer is to learn to be more nimble, and trade the cyclical markets.
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Dow Jones Industrial Average, 1966 – 1982
click for larger chart

Rydex 66-82

data for chart courtesy of Bloomberg



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During this period, we see rallies as much as strong as 75% and sell offs as brutal as 45%.

This is not a goo9d environment for the Buy and Hold approach. It works well ONLY during secular — not cyclical — Bull phases. You can hold stock for decades if you buy into the early stages of a secular period. Think of the years right after 1935, 1946 or 1982. But if you by at the wrong end of a secular run — 1929, 1966, or 2000 — and it took many years to get back to breakeven; and thats before inflation:

1929 purchase breakeven = 1954 (25 years)
1966 purchase breakeven = 1982 (16 years)
2000>(breakeven = ?)

History suggests that a top ticking Nasdaq holder will not return to breakeven — 5100 — until between 2015-25

 


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Source:
Investing —More of a Challenge
Rydex Funds

http://www.rydexfundsfp.com/pdf/ium_6pager.pdf

Category: Investing, Markets, Psychology, Technical Analysis

Market Cycles: 100 Year DJIA

Yet another look (see prior takes here and here) at the concept of market cycles. The past century  shows alternating Bullish and Bearish phases, secular periods each lasting for an extended time (between 10 to 20 years). > Dow Jones Industrials, 1903 – 2004 Note that markets are up slightly for 2005 since this chart…Read More

Category: Economy, Investing, Markets

Katrina Lowers Year End Expectations

Category: Commodities, Economy, Investing, Markets, Psychology

Predictions and Accountability

Category: Economy, Financial Press, Investing

When to Sell Mutual Funds

Category: Investing

Dow Jones Chart (1900-2004)

There is a terrific Dow Jones Chart (1900-2004) for sale at the Minyanville.com gallery. Its along the same concept of a chart we did back in 2003 — only this one includes P/E ratios, which is a very instructive addition to the graph: click for an enormous chart: “Officially licensed and designed by Minyanville’s own…Read More

Category: Investing, Markets

Time to Bet Against the U.S. Consumer?

Category: Commodities, Economy, Investing, Markets, Psychology, Retail

Earnings or Multiple Expansion?

Category: Earnings, Investing, Markets

Apprenticed Investor: The Stock Pre-Nup

Category: Investing, Psychology, Technical Analysis, Trading

Has Oil Reached the Tipping Point?

Category: Commodities, Economy, Investing, Retail