Worried about your investments? Here’s how the smart money made 100% when market gloom was this bad.
All of these weaknesses are actually good news.
The good news for investors I have heard long ago is that the intellectuals of M.B.A. holding the world's pension funds are now hating the stock market for revenge.
On March 24, a few weeks before he promised to buy Twitter, Elon Musk posted a survey on social media: "Twitter's algorithm should be open source," he wrote, with ways for users to vote "yes" or "no." Some Twitter technology is already open source, which means it is publicly available for anyone to ...
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Elon Musk is the second richest man in the world, with an estimated net worth of $ 155bn. He has founded some of the world’s most successful tech companies from PayPal to Tesla, and his voice weighs heavily on technology circles, but his influence on the crypto market is astoundi...
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They just revealed what they believe are the ten best stocks for investors to buy right now…
According to a recent comprehensive study by BofA Securities, global investment managers are now at a historic level, creating uncertainty and darkness. Bank of America survey about 300 financial managers worldwide with approximately $ 900 billion. Depending on how you measure up, they are now as strong as stocks as they were during the Covid crash two years ago, the depth of the global financial crisis in late 2008, the Iraq war in 2003, in the weeks that followed. 9/11 in 2001, and the global financial crisis in late 1998.
What does this mean for you and me, grateful for your retirement?
Everything that needs to be said about the forecast can be said of the deceased, New York Yankees general manager Casey Stengel (“Never predict, especially about the future”) or banker J.P. Morgan Sr., who said when asked about his stock market. the forecast responded by expecting the share prices to fluctuate.
But if the past is the same as the future, the latest survey results will be bullish. That is especially true if you continue to move away from the stock market, following closely the day-to-day, and even more so as a regular Main Street investor investing 401 (k) or his IRA at the end of each month.
Out of curiosity I went back and forth eight times over 25 years ago when, according to a BofA Securities study, financial managers around the world were almost as weak and hopeless in stocks as they are now. (Prior to 2008 research was conducted by Merrill Lynch, who was then taken over by the Bank of America.)
And I looked at how you would behave if, in all those months, you just went out and invested $ 10,000 in the S&P 600 SML, a 3.18% index of a small U.S. company. and then hold for five years, which is about the recommended minimum investment time for a typical investor. (I quit in March 2020, as recently.)
The result is total?
Your average return in the next five years will be just over 100%. In other words, you would have doubled your money.
By doing nothing more than buying a small cap reference bag where the fund managers are really hopeless, and then holding on for five years.
The worst five-year profit was 60%, following the 2008 financial crisis. The best was 160%, followed by the financial crisis of 2008. Not a single one lost money. In six out of eight cases double or better.
Why did I choose stocks for small companies? Well, you can use any stock market indicator and the results will be comparable at least. But stocks of small companies are often more volatile than stocks of large companies, so they fall very nervous and rise higher in the boom. As a result, they tend to be the best way to make a contrarian bet. The time to buy small caps is in crisis, when everyone is very scared.
The Russell 2000 RUT, -3.56% is a widely followed index of shares of small U.S. companies, but the S&P 600 is generally the most popular. It eliminates many small companies that are inferior, speculative and losing. And there is evidence that among the stocks of small companies, at least, you want to stick to high-quality companies.
As always, I pass on information to long-term investors that they may find useful. What you do with it is up to you.
Those wishing to take up this bet have a number of low-cost indicators to choose from, including the iShares Core S&P Small Cap ETF IJR, -3.10% of the S&P 600 and the Vanguard Russell 2000 ETF VTWO, -3.36% of Russell.
If you use the S&P 500 SPX index, -4.04% of large corporate shares, however, a five-year return on normal performance is very good, but not so good. And on one of the eight occasions — July 2000 — to buy an S&P 500 reference wallet such as the SPDR S&P 500 ETF SPY, -4.03% and a five-year suspension still cost money (even 5%). This is because at that time a large bubble in the stocks of large companies was just beginning to subside. (Some people argue that we are in a similar situation with regard to major U.S. caps today.)
A recent BofA survey also shows that financial executives are not well invested in bonds, Eurozone shares, emerging market shares, technology shares and consumer-selected stocks. If that ends up failing in the appropriate ETFs — eg, AGG, + 0.40%, EZ, -3.23%, VWO, -2.17%, QQQ, -4.91% and XLY, -6.54% - I will be very surprised.
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