92% of the performance from 8 stocks, the other 492 less than a 6 month T-Bill. :-)
You always have an excuse for why markets don't just dive to the bottom.
... meanwhile, under the hood of the Fed balance sheet, as well as commercial banks that reached for yield because of zero rate policy. pic.twitter.com/1IlNH8AZ7E
— John P. Hussman, Ph.D. (@hussmanjp) July 6, 2023
The eight biggest holdings in SP500 are the “big eight” tech and tech-ish stocks Igy is referring to. They (8 out of about 500 stocks) account for roughly a quarter of the value of the index, and thus dominate market movements. In my view, this is important information. If tech tanks, it will sink the three major US indices (including the DOW and NASDAQ), not just tech names. This is, I think, the point Igy has been trying to make and seems lost on the crowd. To each their own, I suppose, buyer beware, and all that…
The eight biggest holdings in SP500 are the “big eight” tech and tech-ish stocks Igy is referring to. They (8 out of about 500 stocks) account for roughly a quarter of the value of the index, and thus dominate market movements. In my view, this is important information. If tech tanks, it will sink the three major US indices (including the DOW and NASDAQ), not just tech names. This is, I think, the point Igy has been trying to make and seems lost on the crowd. To each their own, I suppose, buyer beware, and all that…
If it's so important, what you are doing about it? Spoiler alert: It's actually not important at all, it's a random data point for finance nerds to blabber about. If I had spent the last 10 years making investment decisions based on Igy's awful predictions I would have a lot less money and would still be working.
This post was edited 55 seconds after it was posted.
The eight biggest holdings in SP500 are the “big eight” tech and tech-ish stocks Igy is referring to. They (8 out of about 500 stocks) account for roughly a quarter of the value of the index, and thus dominate market movements. In my view, this is important information. If tech tanks, it will sink the three major US indices (including the DOW and NASDAQ), not just tech names. This is, I think, the point Igy has been trying to make and seems lost on the crowd. To each their own, I suppose, buyer beware, and all that…
If it's so important, what you are doing about it? Spoiler alert: It's actually not important at all, it's a random data point for finance nerds to blabber about. If I had spent the last 10 years making investment decisions based on Igy's awful predictions I would have a lot less money and would still be working.
Grantham predicted an 85% (revised to 70%) chance of a stock market crash for this year. The market has done magnificently since his prediction ( I think in April).. He has made similar predictions in 2022, 2021 and 2020. If I had a penny for all the doom and gloom predictions for the market of the so-called "experts) I would be a very rich man. Not Flagpole rich but rich nonethless.
I guess we will agree to disagree about the importance of knowledge. If you’d like to engage on this topic, let’s please avoid red herrings about what might have happened had I listened to Igy. I’m trying to make a point about understanding what you are buying when you decide to buy the index, as that has a bearing on the potential risks and rewards. If you think that is irrelevant, then maybe we are having two different conversations altogether, and I’m just missing the point.
I guess we will agree to disagree about the importance of knowledge. If you’d like to engage on this topic, let’s please avoid red herrings about what might have happened had I listened to Igy. I’m trying to make a point about understanding what you are buying when you decide to buy the index, as that has a bearing on the potential risks and rewards. If you think that is irrelevant, then maybe we are having two different conversations altogether, and I’m just missing the point.
So what exactly is your point? That people should not invest money in the S&P500 index? If so then what should they do?
I’m not here to tell anybody what to do. We all are at different stages of life with different portfolio size and long term objectives and risk tolerance. I’m weighing in on a specific topic that represents a pertinent consideration for some folks in weighing potential risk and return.
I guess we will agree to disagree about the importance of knowledge. If you’d like to engage on this topic, let’s please avoid red herrings about what might have happened had I listened to Igy. I’m trying to make a point about understanding what you are buying when you decide to buy the index, as that has a bearing on the potential risks and rewards. If you think that is irrelevant, then maybe we are having two different conversations altogether, and I’m just missing the point.
i haven't read all of what you wrote, and won't.
For me, I mostly only follow what the Nasdaq is doing and adjust my strategies accordingly, with a nod to the SNP 500 for the broader market. Dow, I don't really care.
But I did know that the large tech companies as mentioned reside in each, so this wasn't news to me.
I’m not here to tell anybody what to do. We all are at different stages of life with different portfolio size and long term objectives and risk tolerance. I’m weighing in on a specific topic that represents a pertinent consideration for some folks in weighing potential risk and return.
- investing in the SP500 through an index-tracking ETF or the like is an easy way to follow the market as represented by that index. One could instead choose to follow other indices at their preference. That one is as good as any, maybe better than most, usually giving good returns and in its history giving good long term returns
- if one is sensitive to big declines, as occur from time to time in all markets, they should think carefully about how they balance their portfolio between safer and riskier investments. One ought to think about risk/reward balance of all components of their portfolio
- knowing something about the basic composition of an index can shed some light on risk and reward, which might be considered useful insight by some
- all cap-weighted indices will be dominated by a relatively small number of stocks, concentrating risk and reward therein. Knowing what these stocks are might be useful in evaluating risk and reward
I’m not here to tell anybody what to do. We all are at different stages of life with different portfolio size and long term objectives and risk tolerance. I’m weighing in on a specific topic that represents a pertinent consideration for some folks in weighing potential risk and return.
So you're just fearmongering then?
No I’m not. You’re reading something between the lines that’s not there.
Used the opportunity for a quick trade and currently up on that one. I'd love to see a big drop, though, of like 15% so I could pick back up a sizable trade that I unloaded at the bottom so as to not go into the red. That will probably never happen, though.
Yawn. You predicted earlier this year that the S&P 500 would be at or near 3000 by year's end. It was at 3991 when you said that. Right now, even after the big losses today, it sits at 4406, and it is up nearly 15% YTD...something you or any graph you would ever put up here showed or would show. we shall see how the rest of the year goes.
I don't care that you can't predict how the markets will do. I can't do that either. I only care that you think you can (and I actually don't even care that much). You can't.
The eight biggest holdings in SP500 are the “big eight” tech and tech-ish stocks Igy is referring to. They (8 out of about 500 stocks) account for roughly a quarter of the value of the index, and thus dominate market movements. In my view, this is important information. If tech tanks, it will sink the three major US indices (including the DOW and NASDAQ), not just tech names. This is, I think, the point Igy has been trying to make and seems lost on the crowd. To each their own, I suppose, buyer beware, and all that…
If it's so important, what you are doing about it? Spoiler alert: It's actually not important at all, it's a random data point for finance nerds to blabber about. If I had spent the last 10 years making investment decisions based on Igy's awful predictions I would have a lot less money and would still be working.
Of course that is not true. Just the other day I mentioned SOXS and TECS, the former up ~15% and the other ~6%. Annualized in the 100s. But you don’t want to recognize that.
This post was edited 2 minutes after it was posted.
The eight biggest holdings in SP500 are the “big eight” tech and tech-ish stocks Igy is referring to. They (8 out of about 500 stocks) account for roughly a quarter of the value of the index, and thus dominate market movements. In my view, this is important information. If tech tanks, it will sink the three major US indices (including the DOW and NASDAQ), not just tech names. This is, I think, the point Igy has been trying to make and seems lost on the crowd. To each their own, I suppose, buyer beware, and all that…
If it's so important, what you are doing about it? Spoiler alert: It's actually not important at all, it's a random data point for finance nerds to blabber about. If I had spent the last 10 years making investment decisions based on Igy's awful predictions I would have a lot less money and would still be working.
If it's so important, what you are doing about it? Spoiler alert: It's actually not important at all, it's a random data point for finance nerds to blabber about. If I had spent the last 10 years making investment decisions based on Igy's awful predictions I would have a lot less money and would still be working.
Of course that is not true. Just the other day I mentioned SOXS and TECS, the former up ~15% and the other ~6%. Annualized in the 100s. But you don’t want to recognize that.
Good one, Igy. LOL.
This post was edited 19 seconds after it was posted.
Reason provided:
tipo
I think it's time The Fed recognizes that its string of raising rates has had little to nothing to do with the tamping down the job market. It really needs to stop raising rates. The real target is inflation, and that rate has dropped consistently for 10 straight months. It will continue to trend toward the norm too even if The Fed does nothing.
The job market is hot and likely will remain hot for a long while yet, and here are the three main reasons (none of which have to do with Biden):
1) Boomers are retiring...and retiring for good. Many of them did very well in the stock market, and so they can afford to just flat out retire rather than take on part-time or easier jobs as many retired people have done in the past.
2) Fewer immigrants here. The MAIN reason we have that now is because the pandemic kept a lot of them from coming here. Trump's demonizing of them didn't help, but that's a small factor.
3) Obamacare (Affordable Care Act if you'd rather) has allowed a very reasonable way to retire before age 65 while not having to be as concerned about healthcare attached to a full-time job.
It's time (long past time) to allow normal market forces shape the job market and how much companies need to pay people to get them to work for them. The Fed should keep its hands off. Inflation has gone down. No need to keep raising rates.
Of course that is not true. Just the other day I mentioned SOXS and TECS, the former up ~15% and the other ~6%. Annualized in the 100s. But you don’t want to recognize that.
Good one, Igy. LOL.
SOXS bought at $9.57 7/3 , over $11.00 earlier today. :-)
- investing in the SP500 through an index-tracking ETF or the like is an easy way to follow the market as represented by that index. One could instead choose to follow other indices at their preference. That one is as good as any, maybe better than most, usually giving good returns and in its history giving good long term returns
- if one is sensitive to big declines, as occur from time to time in all markets, they should think carefully about how they balance their portfolio between safer and riskier investments. One ought to think about risk/reward balance of all components of their portfolio
- knowing something about the basic composition of an index can shed some light on risk and reward, which might be considered useful insight by some
- all cap-weighted indices will be dominated by a relatively small number of stocks, concentrating risk and reward therein. Knowing what these stocks are might be useful in evaluating risk and reward
I think that’s the gist of it.
Nice info Retiree.
I would add the following, the 3 things to always remember about the market(s):
1) Diversification is of paramount importance.
2) In the long-term, the market ALWAYS goes up. I will quit saying that when it ceases to do that.
3) Index funds beat actively managed funds 70- to 80% of the time.
I will add one or two more ...
4) People who keep getting in and out of the market never do as well as those who buy a position and hold on to it.