Forex Market News Today
  • Home
  • News
  • LiveHourly
  • Markets
  • Stock
  • Business
  • Economy
  • World
  • Politics
  • Energy
  • exchange
  • companies
No Result
View All Result
Forex Market News Today
Home Markets

This chart might have you rethinking your approach to the stock market

3 months ago
in Markets
3 min read
This chart might have you rethinking your approach to the stock market
Share on FacebookShare on Twitter


Raise your hand if you knew, after the March crash, that the stock market would hit record highs by the end of the year. Stop. Put it down. Nobody believes you.

Even for the hardy “buy when there’s blood in the streets” crowd, throwing more money into the game when the pandemic was starting to explode and the world was spiraling toward economic disaster had to have seemed terrifying at the time.

Nevertheless, as Ben Carlson, portfolio manager at Ritholtz Wealth Management LLC, pointed out in a blog post on Sunday, “investing when things look bleak remains a profitable strategy.”

He pointed to this chart as evidence:

In other words, when unemployment is high, stocks soar, and when it’s low, gains are relatively paltry. At least that’s what history has told us.

“It’s counterintuitive that the best returns would come from investing when the economy is getting body-slammed,” Carlson wrote. “But being uncomfortable when investing is typically a good sign.”

He acknowledged that he felt, during the initial market drop, that stocks could potentially fall another 60% from there. In that four-week period that started in late February, stocks experienced the fastest bear market of 30% or worse from all-time highs in history. Yet, just five months later and stocks were again pushing up into uncharted territory.

“Just think about how many brilliant people decided to play it safe and wait for a retest of the lows after stocks bounced,” Carlson said. “Guess, what? By the time the dust settled it was already too late. The stock market proved a lot of people wrong this year.”

Of course, it was easy to be caught wrong-footed in the face of rising unemployment, mounting coronavirus death tolls and political unrest, but even so, the actions of the Federal Reserve, in retrospect, was where the focus should have been.

“The government threw trillions of dollars at this thing. They literally gave people money,” Carlson said. “It seems obvious now that those trillions and an implicit backing from the Fed would provide a floor under the markets. But few people at the time were predicting a rush back to all-time highs while these programs were being rolled out.”

The best way to navigate the madness? It’s hard to beat the buy-and-hold approach, he suggested, though sticking to it through a 30% peak-to-trough drop within a month wouldn’t have been easy. Then again, stocks have recovered 60% since then to make for a net 15% gain.

“Holding is difficult but it may be even harder to go one step further and buy when stocks are falling and everyone is running for the exits,” Carlson wrote. “Buy and hold only works if you both buy and hold when it feels like the market may never rise again.”

As for the major indexes, the Dow Jones Industrial Average
DJIA,
+0.16%

finished last week with a 0.6%…



Go to the news source: This chart might have you rethinking your approach to the stock market

Tags: approacharticle_normalC&E Exclusion FilterchartcommodityCommodity/Financial Market NewsCOMPContent TypesDJIADow Jones Industrial AverageEquity MarketsFactiva Filtersfinancial market newsfinancial servicesinvestingInvesting/SecuritiesMarketNASDAQ Composite IndexrethinkingRussell 2000 IndexRUTsecuritiesSPXStock
Previous Post

Brexit, lockdowns and a US stimulus package dent the market’s mood

Next Post

Don’t eat raw meat, cannibal sandwiches

Related Posts

Tesla’s Inclusion in the S&P 500 Leaves Less Room for Some Sectors
Markets

SPACs Are Red Hot. Why That Could Spell Trouble.

by Forex News
March 6, 2021
0

This commentary was issued recently by money managers, research firms, and market newsletter writers and has been edited by...

Read more
Tesla Facing $250 Billion Market Cap Loss On Rates, Bitcoin
Markets

Tesla Facing $250 Billion Market Cap Loss On Rates, Bitcoin

by Forex News
March 5, 2021
0

Tesla Inc.  (TSLA) - Get Report shares traded lower again Friday, potentially extending a move that has loped nearly $250...

Read more
Reflation trades in FX markets expected to continue in March: Reuters poll
Markets

Reflation trades in FX markets expected to continue in March: Reuters poll

by Forex News
March 4, 2021
0

BENGALURU (Reuters) - The reflation trade that spooked currency markets and threw them into disarray will be in play...

Read more
Treasury bond wobble heightens concerns over health of $21tn market
Markets

Treasury bond wobble heightens concerns over health of $21tn market

by Forex News
March 3, 2021
0

The severity of last week’s US government bond sell-off has rekindled concerns about the health of the world’s largest...

Read more
Live Foreign Currency Exchange Rates
Markets

China fears overseas market ‘bubble’; German exports to UK down 30% in January –…

by Forex News
March 2, 2021
0

According to the German labour agency, new applications for short-time work schemes dropped somewhat in February to 500,000. This...

Read more
Live Foreign Currency Exchange Rates
Markets

Global stocks bounce back; UK and US factories suffer supply-chain woes – as it …

by Forex News
March 1, 2021
0

The S&P 500 on Monday was headed for its best day since June 5 as bond markets calmed after...

Read more
Asian stocks bounce as bond market calms
Markets

Asian stocks bounce as bond market calms

by Forex News
March 1, 2021
0

SYDNEY (Reuters) - Asian shares firmed on Monday as some semblance of calm returned to bond markets after last...

Read more
Staying private: the booming market for shares in the hottest start-ups
Markets

Staying private: the booming market for shares in the hottest start-ups

by Forex News
February 28, 2021
0

In 2014, an Austrian entrepreneur offered investors a rare chance to purchase shares in Jumio, his fast-growing and profitable...

Read more
3 Reasons the Stock Market Could Crash in the Next 3 Months
Markets

3 Reasons the Stock Market Could Crash in the Next 3 Months

by Forex News
February 27, 2021
0

Despite a global pandemic and historic volatility over the past year, investors have a lot to be thankful for....

Read more
Warren Buffett’s favorite stock market indicator still screams sell
Markets

Warren Buffett’s favorite stock market indicator still screams sell

by Forex News
February 26, 2021
0

TipRanks2 ‘Strong Buy’ Stocks With 7% Dividend YieldYou can get whiplash, trying to follow the market fluctuations these days....

Read more
Next Post
Don’t eat raw meat, cannibal sandwiches

Don't eat raw meat, cannibal sandwiches

Subscribe
Login
Notify of
guest
guest
0 Comments
Inline Feedbacks
View all comments

Latest Forex News

Pelosi moves to break stimulus stalemate with key meeting

Pelosi moves to break stimulus stalemate with key meeting

3 months ago
Under Biden, China faces renewed trade pressure

Under Biden, China faces renewed trade pressure

1 month ago
GBP/USD, EUR/USD, DXY: Charts & Technical Analysis

GBP/USD, EUR/USD, DXY: Charts & Technical Analysis

3 days ago
Watch Octopuses Punch Fish Like Eight-Armed Bullies of the Sea

Watch Octopuses Punch Fish Like Eight-Armed Bullies of the Sea

2 months ago

Today Market News

Is Beyond International (ASX:BYI) Weighed On By Its Debt Load?
Live

Things Look Grim For Live Nation Entertainment, Inc. (NYSE:LYV) After Today’s Do…

March 6, 2021
What the future holds for Exxon
Economy

What the future holds for Exxon

March 6, 2021
Unemployed Kansan owes more than $11K in benefits after getting overpayment lett…
Economy

Unemployed Kansan owes more than $11K in benefits back after getting overpayment…

March 6, 2021
Rising seas: A failure of economics to cut greenhouse emissions | Counting the C…
Economy

Rising seas: A failure of economics to cut greenhouse emissions | Counting the C…

March 6, 2021
The pope and the ayatollah: Francis meets Iraq’s Sistani
World

The pope and the ayatollah: Francis meets Iraq’s Sistani

March 6, 2021
Senate extends unemployment benefit in bill
Economy

Senate extends unemployment benefit in bill

March 6, 2021
  • Contact Us
  • Terms of Use
  • Privacy Policy
  • DMCA
  • CCPA

© 2020 Siteofforex.com

No Result
View All Result
  • Home
  • News
  • Live
  • Markets
  • Stock
  • Business
  • Economy
  • World
  • Politics
  • Energy
  • exchange
  • companies

© 2020 Siteofforex.com

wpDiscuz