What a hell of a rollercoaster we've been on since hitting market highs over 40 trading days ago. Although we still find ourselves in the middle of a pandemic that has shuttered businesses and caused the largest spike in employment in our history, the major U.S. stock indices, which are the S&P 500, the Dow Jones, and the Nasdaq 100, have realized modest gains over the past few weeks as they try to inch their way back to previous highs. Will the trend upwards continue or are the upcoming earnings reports going to sink the markets again? I can confidently say that I have no idea.
However, I thought it might be interesting to review where each of the three primary U.S. indices are in relation to early periods at this price point. Let's start with the Dow.
The Dow Jones
The Dow Jones June e-mini futures contract closed at a price of 24,159 on April 17, 2020. Before this crisis hit the last time the Dow was at this level was back on January 17, 2019. For the Dow Jones, the last 15 months have been a wash.
The S&P 500
The S&P 500 June e-mini futures contract closed at 2,870 on April 17, 2020. Before this crisis hit the last time the S&P 500 was at this level was back on October 3, 2019. So for the S&P 500, the last 6.5 months have been a wash.
The Nasdaq 100
The Nasdaq 100 June e-mini futures contract closed at 8,809 on April 17, 2020. Before this crisis hit the last time the Nasdaq 100 was at this level was back on January 8, 2020. Incredibly, the Nasdaq 100 is only a wash for a little over three months.
What does this all mean? A whole lotta nothing! With all of the various investment vehicles, strategies, etc., no one should be suffering the psychological rollercoaster of the past few months because they were "all in" on any giving index. However, anyone playing the fool's game of buying and holding the major indices can see how being invested in the Nasdaq 100 during this time would have been a better "play".
The markets have taken and they have given over the last 40 trading days, work with your advisor to develop a personalized plan that works for you and your family.