•2,209. Can you handle it?
Lovers of the DJIA gotta be thrilled with the new highs this index continues to reach. But while no one knows how long that index will keep breaking records and reaching new highs, one thing everybody knows is that indices rise and fall over time. Even the DJIA.
So let’s bring a little pencil-to-paper reality into the world to prepare investors for what a 10% drop in the DJIA at its closing level on Friday, August 4, 2017 would translate to.
And that answer would be: A fall of 2,209 points bringing the Dow to roughly the 20,000 level.
Funny how a 2200 fall sounds like a lot, but 20,000 not quite so much.
That aside, take that drop figure up a notch to 20% and the DJIA would fall 4400 points.
Here’s hoping you, your mind and your portfolio are prepared to handle a fall of 10% or more because drops happen. How big a fall and for how long is the big unknown.
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Market Quick Glance
The DJIA continued to reach a high new high level at week’s end. The same wasn’t true for the rest of the crew.
Below are the weekly and 1-year index performance results— including the dates each reached new highs— according to data from CNBC.com. Data is based on prices at the close of business for the week ending on Friday, Aug. 4, 2017.
-DJIA + 11.79% YTD up from last week’s +10.46%
- 1 yr Rtn +20.38% up from last week’s 18.28%
The DJIA reached another new all-time high on August 4, 2017 of 22,092.81.
(Previous highs since March include: 21,841.18 on July 28, 2017; July 14, 2017 of 21,681.53; July 3,2017 of 21,562.75; 21,535.03 on June 20, 2017; 21,391.97 reached on June 14, 2017; 21,305.35 on June 9, 2017; 21,225.04 on June 2, 2017; and 21,169.11 on March 1, 2017.)
-S&P 500 +10.63% YTD up a bit from last week’s 10.42%
- 1yr Rtn +14.44% up from last week’s +13.92%
The S&P 500 reached a new all-time high on July 27, 2017 of 2,484.04.
(Previous high of 2,477.62 was reached on July 20, 2017. Prior to that date new highs and dates include: 2,463.54 on July 14, 2017; 2453.82 on June 19,2017; 2,446.2 reached on June 9, 2017; 2,440.23 reached on June 2, 2017; 2,418.71 reached on May 25, 2017; 2,405.77 reached on May 16, 2017; 2403.87 on May 9, 2017; 2,400.98 reached on March 1, 2017.)
-NASDAQ +17.99% YTD down from last week’s +18.42%
- 1yr Rtn +22.94% down from last week’s 23.66%
The Nasdaq reached a new all-time high of 6,460.84 on July 27, 2017.
(Previous highss include: July 20, 2017 of 6,398.26; 6,341.7 on June 9, 2017; 6,308.76 on June 2; 6,217.34 reached on May 25; 6,170,16 on May 16; 6,133 on May 9, 2017; 6102.72 on May 2, 2017; 6074.04 on April 28, 2017; and 5,936.39 on April 5, 2017.)
-Russell 2000 +4.07% YTD down from last week’s +5.31%
- 1yr Rtn +16.36% down from last week’s +17.41%
The Russell 2000 reached its latest all-time high on July 25, 2017 of 1,452.09.
(Previous highs include: 1,452.05 on July 21, 2017; 1,433.789 on June 9, 2017; 1,425.7 reached on April 26, 2017 and of 1,414,82 reached on March 1, 2017.)
-Mutual funds
Average YTD returns? Once again, less than those of the previous week.
At the close of business on Thursday, Aug. 3, 2017, the average YTD total return for U.S. Diversified Equity Funds closed at 8.93%. That’s down from the 9.59% average return of the week before, according to Lipper. And that was down from the week previous to it of 9.84%.
Mixed Asset Funds invest in both stocks and bonds—hence the name “mixed”. Under that broad heading that included 5,915 funds, the average year-to-date return was 8.37%.
The biggest winners in that group were Mixed-Asset Target Funds—-particularly those with the longest maturity dates. The winner here was Mixed-Asset Target 2055+ Funds, 12.67%.
Others with strong year-to-date average returns include: Mixed-Asset Target 2045 Funds had average returns of 12.35%; Mixed-Asset Target 2050 Funds at 12.19%, Mixed-Asset Target 2040 Funds, 11.64% and Mixed-Asset Target 2015 Funds 11.34%.
The poorest returns under the Mixed-Asset heading were found in Alternative Multi-Strategy Funds, 2.30% and Absolute Returns Funds, 3.08%.
Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.
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Gas highs
Just about the time I got used seeing gas prices hovering around the $2 a gallon level, prices jumped up. Rats!
But things could be worse.
According to AAA, $2.35 was the average price for a gallon of regular unleaded gas around the country last week. One month ago it was 2.24 and one year ago it was 2.13.
Here’s the “worse” part: The highest price on record for a gallon of reg. unleaded was $4.12 reached in July 2008.
Guess 2.35 isn’t so bad after all.
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