Posts filed under “Markets”

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

Chart of the Week: NYSE Making New Highs

Category: Markets, Psychology, Technical Analysis

Economic, Market Impact Of Hurricane Katrina

Good round up from Dow Jones:

Over a week after making
landfall, the broad economic fallout from Hurricane Katrina continues to
unfold. Economists are downgrading their third quarter growth forecasts for
the U.S. economy and not all think that rebuilding in the wake of the storm
will bring things back in the fourth quarter. Markets have stabilized
however, taking their cue from the price of oil and other refined energy
products, which have been hit by a major international effort to release
emergency energy reserves in an attempt to alleviate a supply crunch.
Estimates of the economic loss from the hurricane exceed $100 billion, with
the Senate’s top Democrat putting it closer to $150 billion.

Here
are some of the main market and economic impacts:

Read More

Category: Commodities, Currency, Economy, Markets

Chart of the Day: S&P500 following Gasoline Price Surges

Category: Commodities, Economy, Markets

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

End of the World as a Profit Opportunity

Category: Markets, Psychology