The NASDAQ-100 index represents the largest 101 non-financial companies listed on the NASDAQ exchange. It is a modified capitalization-weighted index. The S&P 500 index on the other hand is a free-float capitalization-weighted index is composed of the largest 500 companies trading on the US markets. The S&P 500 is more representative of the US economy …
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US stocks have performed very well in the past few years over their international peers. However that is not always the case. There have years when foreign stocks outperformed US stocks. The key point to remember is that the outperformance of US stocks over international stocks and vice versa rotate over the years. The following …
Continue reading ‘On The Outperformance of US and International Stocks From 1971 to 2022’ »
Market declines are common in equity markets. Stocks do not always go up forever. Bull markets are followed inevitably by bear markets and vice versa. They key point for investors to remember is that when stocks decline it is important to stay the course and not bail out. Unless absolutely necessary it is never a …
Continue reading ‘Major Declines and Recoveries in US Equity Markets: Chart’ »
Investing in equities seems like a unwise decision these days due to a variety of reasons. Buying foreign stocks sounds even more imprudent with US equities performing very well so far this year. An investor looking to put money to work, can easily earn over 5% simply by buying a 1-year CD. Or to earn …
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Allocating assets among various sectors is one way to implement the diversification strategy. This is because the sector that earns the best returns in one year might end up turning the worst the following year. For example, the below chart shows the annual sector returns of the S&P 500 index from 2013 to 2022. We …
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