Market Currents
In a year when safer investments generally paid off and risky bets didn't: Dow +5.53%, S&P...
-
Friday, December 30, 2011, 8:15 PM ETIn a year when safer investments generally paid off and risky bets didn't: Dow +5.53%, S&P -0.003%, Nasdaq -1.8%, Russell 2000 +5.45%, Nymex crude +8.15%, Brent crude +13.33%, natural gas -32.15%, copper -22.71%, Comex gold +10.18%, U.S. dollar -3.22% vs. euro, 10-year Treasury yield -43.57% to 1.88%.
Other date
Latest Articles
This news story has 8 comments:
I know everyone has new year fever, but as supposedly intelligent investors, why all the focus on annual gains per the calendar year?
It's meaningless, it's arbitrary.
I have yet to meet an investor who invests all of his money for the year on the first trading day of that calendar year.
The market was in the late stages of a long-standing uptrend on 1/1/2011, and it wouldn't have been wise to go all-in at that time if you were following almost any kind of strategy.
If you're a stock-picker, you'd wait for specific opportunities, per stock.
If you're into indexes, just buying on the dips would have done well also, and there were a number of dips to buy on.
And simple dollar cost averaging would have outperformed the static Y/Y metric centered on January 1st as well, precisely because you would have bought on some of the dips.
If you're a fan of technical analysis, simple things like moving average crosses would have done better too.
So who care's what the market returns were from the first trading day of the year to the last? It's as arbitrary as any other 1-year period, and it's time the punditocracy realized that!
You make good points.
The hedge and mutual fund managers get paid on annual performance so for them I guess it is meaningful. For others, I think everyone likes to have some benchmark, meaningful or not.
Here's to a better 2012 though I think it will be very volatile.
You're totally correct.
Measuring the success of any sector or stock based on any arbitarary time period is pretty silly, especially since some groups tend to do very well in the fourth quarter year after year, while others have their typical high points in the second - or even the difficult third - quarter. For instance, the ags are the play in the summer, possibly moreso in 2012 than most years, since they are so depressed. Maligned nat gas stocks have their day in the sun in the late second quarter or early third quarter year after year.
And many gold stock investors had a good year, not a bad one, in 2011, with three or four - in some cases, five! - very nice little rallies to sell into.
We all made mistakes trading in 2011 - even, I believe, some very prominent hedgies. But we all had our successes, I would hope. And in 2011, more of the same.