Random Thoughts on 2009
Dec 23, 2009
Posted by Jody Eisenman | Filed under Uncategorized
As the year enters its’ last few trading days, I will share some recapping thoughts on what has transpired. For the year, the S and P 500 index has risen just under 24%, which is a pretty solid return historically. However, the real story is the two tiered nature of this performance. Between January 1 and March 8, the index went from 903 to 666, a terrifying drop of over 26%.
The crazy part of this rally is that very few retail (read: individual as to institutions) investors has participated, other than hanging in by not selling through the decline. According to a report on CNBC yesterday, TrimTabs.com reports that there has been a net OUTFLOW from mutual funds this year. In other words, the average investor has actually reduced their stock holdings during the rally. Generally, the opposite is true; this, people tend to buy when prices are rising. In addition, I have seen almost no analysts who recommended that clients stay long throughout this rally. Combined with very little insider buying (insiders are corporate executives whose buying patterns generally are a good bullish indicator) makes this the Incredible Rally That Almost No One Believes In. I find this truly amazing.
Although no one knows what 2010 will bring, I think it’s a safe bet that the volatility will not approach that of the last 2 years. Either way, it should be interesting.
