This has been a heck of a year for, well, pretty much everyone. Investors haven't been left out of the drama.
After the fastest-ever bear market and biggest-ever rebound, most of the broad equity indexes are back near their former highs. Those with a healthy smattering of tech stocks have done even better, of course.
Bloomberg reporter Sarah Ponczek noted that more than 62% of all trading days in 2020 have seen a gain, per JonesTrading. Through this many days in the year, this is the 2nd-largest percentage of positive sessions in 25 years.
Returns in the weeks and months after the most consistently positive years were quite a bit different than returns during the most consistently negative ones, especially over a short- to medium-term time frame.
Momentum is a tricky thing, which is why we look at it from so many angles. Nothing can defeat sentiment extremes like momentum. While the Nasdaq is certainly showing a good amount of it, when we combine it with seasonality, it's not necessarily a reason to think that it can roll right over displays of excessive optimism at this point.
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We also looked at:
- A look at returns in the Nasdaq after the most consistently positive (and negative) years through July
- Investors are yanking big money from stock funds and into bonds
- The ratio between copper and gold has slid for a record number of days