On Friday, the S&P 500 declined a hefty 1.9% and Toronto was down 1.7%.
Overall, 2015 has not been a good year for stock investors, especially for investors in Canadian stocks. The Toronto index is down 12.6%. The average Buy (or higher) rated stock on this site was down 12.3%. Most years, we have done materially better than the Toronto market but that has not been the case this year.
Due mostly to a generous exposure to U.S. stocks my own portfolio is down “only” about 5%.
For 2016, I will be continuing with the same analysis approach but plan to add more companies to the list.
Experienced stock investors know that it is unrealistic to expect every year to result in gains. But they also know that it is realistic to expect to make gains and build wealth at a reasonable rate over the years. Lower stock prices today may very well set us up for superior returns in the future. As long as corporations keep earning strong profits, investors are going to benefit from that over the years.
The moods of investors very much affect stock prices in the short term. But in the long-term it is companies and their customers that affect profits and ultimately stock prices.
I have updated my detailed analysis of the valuation and attractiveness of the Dow Jones Industrial Average. The results indicate that it is likely about fairly valued at this time. But that depends, among other factors, on the forecast for earnings growth that is assumed.
These last few weeks of the year could prove interesting as the market reacts to the FEDs move (or, less likely, lack of movement) next week.
There has seldom been a dull week in the markets in the last several years and that seems set to continue.