S&P 500

Headline risk seems to overload indicators

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As a trader, I look at charts to try and understand crowd behavior.  The headlines make me want to sell everything and hide under a rock until this euro mess is sorted out once and for all.  When I look at the charts, though, I see a different picture.  The S&P 500, DJI, and Russell 2000 all looked extremely oversold and short term bullish divergence on the shorter term RSI line.  Based on the horrendous price action in May though I suspect that it will take a while for the snap back to materialize.  The Russell 2000 is significantly below … Read more

Give me your worst performing funds!

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When I trained stock brokers at Paine Webber, I was responsible for organizing lunches that mutual fund wholesalers would throw for our office brokers.  During those lunches (you had to provide free food to get stock brokers to show up)they would talk about their best performing mutual funds, while we wolfed down sandwiches and tried not to appear overtly bored.  Finally in an act of desperation one day, I interrupted the presentation “Let’s do something different today, ” I suggested.  “Tell us about your worst performing funds.  We’ve been buying your best performing funds and they all seem to turn … Read more

The dividend component was responsible for 44% of the total return of the last 80 years.

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A steady reliable source of dividends will put a floor on the price of many stocks.    According to Standard & Poor’s, the dividend component was responsible for 44% of the total return of the last 80 years of the index.   The orange curve in the chart above shows the results of having all dividends reinvested while the blue line reflects the investment without dividends and just stock appreciation.