Business strategy

Looking Back and Looking Forward

Posted on April 27, 2014 · Posted in Observation

Major U.S. indices closed as follows on March 31: Dow, 16,457.66; Nasdaq, 4,198.99; S&P 500, 1,872.34; Russell 2000, 1,173.04; CBOE VIX, 13.88. Small caps lost 0.84% on the month, leaving the RUT up 0.81% on the year so far; the VIX lost 0.86% for March, reducing its YTD advance to 1.17%.1

% CHANGE Y-T-D 1-MO CHG 1-YR CHG 10-YR AVG
DJIA -0.72 +0.83 +12.93 +5.89
NASDAQ +0.54 -2.53 +29.63 +11.06
S&P 500 +1.30 +0.69 +19.86 +6.63
REAL YIELD 3/31 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.60% -0.65% 1.43% 1.48%

Sources:  online.wsj.com,  bigcharts.com,  treasury.gov – 3/31/141,22,23
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

March marked the end of the first quarter, and it was a mediocre quarter for stocks with the S&P 500 rising little more than a percent. The bull market was clearly tempered these past three months, and articles have emerged here and there about how much longer it can last. (Six more months? Another year? Ten years?) It could be that, as Janet Yellen and other analysts have speculated, the winter froze the economy and the resulting indicators chilled the confidence of investors. We are on the cusp of another earnings season, and if quarterly results and fundamentals both show notable upside while overseas geopolitical crises lessen, then stocks may find even more room to rally. Don’t count the bull down and out just yet.1