From The Big Picture:
Here we are, 10-plus months into the year, and we have nothing to show for it....MORE
At least, that is the case if we measure our progress by the gains (or losses) of the Dow Jones Industrial Average. The index is now unchanged for the year after last week's losses. The previously one-direction market has suddenly recalled what volatility looks like, having for the most part forgotten.
Yes, stocks go up AND down.
At the beginning of the fourth quarter, the Standard & Poor's 500 Index was up about 7 percent for the year; those gains have now been cut by more than half. The Russell 2000 small-cap index was already down almost 5 percent, and the past few weeks have added to the red. The Nasdaq 100 is still positive on the year, but has given back some of its gains.
I can't tell you what will happen in the coming weeks or months, nor can I tell you what to do, not knowing your time horizon, risk tolerance and client base. I can, however, bring to your attention some interesting data points you may not have been aware of:
• Since 1928, markets have averaged about three 5 percent corrections each calendar year;
• U.S. stock markets haven't experienced a 10 percent correction since October 2011;
• Big-cap indexes (S&P 500 and the Dow) are within 5 percent of their all-time highs;
When Barry got to "I can't tell you what will happen in the coming weeks..." I was reminded of some of the Lehman guys and their:
"Mr. Bigg, I can't tell you which direction the next 20% move will be but I can tell you which direction the next 100% move will be."Hard to argue with, in fact I couldn't if I tried.
On a serious note, as your trusted advisor I have to ascertain your risk tolerance.
Wanna cut the cards for ten thousand?
Alrighty, a double levered biotech ETF's it is.
