Fact of the Day: Many Nasdaq Stocks Are In Bear Markets

The S&P and the Dow are down 1.9% and 0.3% year-to-date in the first week of 2022. The NASDAQ Composite index is off by 4.5%. These stats do not tell the full extent of selling underway in the tech heavy NASDAQ.

According to Sundial Capital Research quoted in a journal article over the weekend:

  • About 40% of the stocks in the Nasdaq Composite are down 50% from their 52-week highs.
  • Almost two-thirds are in bear markets or down 20%.

Source: U.S. Stocks Close Lower After Jobs Report, WSJ

Software stocks are taking it on chin after a great run in recent years. Below chart shows a sample of five stocks’ return in the past year:

Click to enlarge

Source: Yahoo Finance

Referenced Stocks:

  • Adobe Inc.(ADBE)
  • Atlassian Corporation Plc (TEAM)
  • DocuSign Inc. (DOCU)
  • Autodesk Inc.(ADSK)

Disclosure: No positions

Dow Jones Industrial Average Annual Total Returns 1896 To 2021: Chart

The Annual Total Returns of Dow Jones Industrial Average from 1896 to 2021 is shown in the chart below. It proves the known fact that stocks tend to go up in the long-term. During the period shown, the Dow was up nearly three-fourth percentage of the time and only down one-fourth of the time. Here are a few fascinating points from the detailed article by Drew Dickson at Albert Capital:

  • Since 1980, the US market has been up for the year 83% of the time.
  • From 2003 to 2021, the market has been up all years except just two.
  • Since 2009, the market has been down only one year.

Click to enlarge

Source: Albert Capital via Novel Investor

He also makes other interesting observations such as comparing US equities to European equities in the above linked piece.

It remains to be seen if the current bull market will continue this year with the market a multitude of headwinds the most important of which is rising rates.

Related ETFs:

  • SPDR Dow Jones Industrial Average ETF (DIA)
  • SPDR S&P 500 ETF (SPY)

Disclosure: No positions

12 Ways to Break the USA: Map

I posted a funny map on European stereotypes created by Yanko Tsvetkov based on Atlas of Prejudice. The following is a similar hilarious map of the good old USA. Number 6 is very funny. Almost all of the country is meat eaters except for the tiny speck of land of California. The entire population in “flyover country” will go to heaven as per number 8. Who knew! 🙂

Click to enlarge

Source: Atlas of Prejudice by Yanko Tsvetkov

S&P 500 Sector Performance by Year From 2007 To 2021

The S&P 500 total returns by sector for the years from 2007 to 2021 is shown in the chart below created by Novel Investor. As with other similar charts, this chart shows the need for diversification among the various sectors. The best sector in one year does not necessarily mean it will be best the following year. For instance, the energy sector was left for dead in 2020 and ended up being the worst performer. But last year it roared back as oil prices soared and economies opened again. It is astonishing that real estate ended up as the second best sector with a return of over 46%. Residential real estate soared to beyond bubble levels as people fled cities and investors and speculators entered the market. In 2020, corona indirectly kept this bubble from forming and the sector was a loser.

Click to enlarge

Source: Novel Investor

Related ETFs:

  1. SPDR S&P 500 ETF (SPY)
  2. iShares Core S&P 500 ETF (IVV)
  3. Vanguard S&P 500 ETF (VOO)
  4. SPDR Portfolio S&P 500 ETF (SPLG)

The Complete List of Constituents of the S&P 500 Index can be found here.

Disclosure: No positions