Subtrack the “Giant 5” and the US Stock Market Hasn’t Made Gains Since January 2018

For the entire rest of the stock market – all its winners and losers combined – minus the “Giant 5,” the period since January 2018 was a very rough and unpleasant ride to nowhere. It declined 1%. You would have been better off putting your money in one of those despicable freaking savings accounts:

“Wild Ride to Nowhere”: 

APPL, MSFT, AMZN, GOOG, FB Soar to New High. Rest of Stock Market is a Dud, Has Been for Years

Subtrack the “Giant 5” and the US Stock Market Hasn’t Made Gains Since January 2018

Among the losers in that rest of the market are companies that used to be the largest in the US stock market, such as Exxon-Mobile, which since January 26, 2018, has lost 48% of its value. The entire and once vast oil-and-gas sector has gotten crushed. 

The market, and broad portfolios, are immensely dependent on the Giant 5. That was great on the way up – on their way to becoming giants, when their share of the overall market doubled in three-and-a-half years, from 10% in January 2017 to nearly 20% today. 

But if they sell off – there are myriad reasons why giants sell off, as all prior giants have found out – the impact of these five companies is going to be proportional to their giant size.

DYI:  While stocks on a broad basis continue their ongoing bear market there is one sector that I’ve mentioned many times before; OIL!  When an investment class appears to be terminally ill as illustrated by Vanguard’s Energy Fund symbol VGENX average annual return for the last ten years is – drum roll please – negative -0.66%!  This is not a jab at Vanguard, all energy funds have had dismal returns over the last 10 years.  However this industry – despite all of the rhetoric – is NOT going into the dustbin of history.  Contrarian thinkers know that nothing is forever; energy companies’ stock prices are at bargain prices.  Vanguard’s energy fund current yield – 4.81% - is typical of many other energy based mutual funds.

Since the Year 2000

From High to Low - Since Year 2000

+ 521.7% Gold

+ 208.1% Transports

+ 170.9% Utilities

+ 124.5% Dow
+ 147.2% Nasdaq
+ 111.0% S&P 500
+  78.4% 30yr Treasury Bonds

+  66.7% Swiss Franc's

+  53.4% Oil 

Easily seen the price of oil compared to these vastly different asset categories has now reached the bottom.  Dollar cost averaging would be the recommended way to go if you have this asset category in your 401k.  If not go to Vanguard – or any fund group of your choice – and begin purchasing shares directly.

Till Next Time

DYI

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