Reality of the market being "down"...

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vaught
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Reality of the market being "down"...

Post by vaught » Fri Feb 16, 2018 9:26 am

I have an older friend that is much much much closer to retirement than I am. He was upset about how "down" the market has been lately. So I tried to tell him that it's really not *that* down. To appease him I pulled up a couple of the major exchanges that automatically update on an icon on my phone.

DOW is at 25,200 down from an all time high of 26,616. So its only down 5.4% from an all time high.

NASDAW is at 7,256 down from an all time high of 7,505. So its only down 3.3% from an all time high.

What confused me is the third exchange my phone lists is the NYSE. It currently sits at 12,856 but says that the all time high (and 52 week high) is 19,763. That would make it down 34.9%.

Am I getting bad data on NYSE?

If not, can someone briefly explain why NYSE would be down so much in comparison to DOW and Nasdaq?

And last question - as someone who tries to follow the simple bogleheads index portfolio (VG Extended Market Index (VEXAX), VG 2055 (VFFVX), VG LifeStrategy Growth (VASGX), VG 2050 (VFIFX), VG 2060 (VTTSX), VG Large Cap Adm (VLCAX), VG Mid Cap Adm (VIMAX), VG Small Cap Adm (VSMAX) and VG Total Stock Mkt Adm (VTSAX), is there one of the above that I should pay more attention to that would be more reflective of how my various funds are doing on a daily basis? I do log in and check them monthly but am able to check the exchanges daily from my phone (and I just check it out of curiosity; I don't let it affect my mood or investment decisions).

livesoft
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Re: Reality of the market being "down"...

Post by livesoft » Fri Feb 16, 2018 9:30 am

Answer to last question: You are kind of asking what benchmark you should use for your portoflio. Well, what is the asset allocation of your portfolio?

My asset allocation is about 60/40, so I compare my portfolio to the Vanguard LifeStrategy Moderate Growth fund (VSMGX) which has a 60/40 asset allocation composed of index funds. I don't expect my portfolio to beat the S&P500 or DJIA except in down years.

And markets are up for 2018, they are not down. Markets had their best week since January 2013 or December 2011 depending on who you read.
Reuters reports wrote:The benchmark S&P 500 index's .SPX 4.3 percent gain since Monday has put it on track for its best week since January 2013. Its pullback from last week's sell-off has been accompanied by low volatility, encouraging economic data and corporate reports.

The Dow Jones Industrial Average .DJI is set for its best week since November 2016, with a 4.2 percent gains, while the Nasdaq Composite's .IXIC 5.6 percent gain since Monday has set it on course for its strongest week since December 2011.
The above shows once again how best days and worst days (or worst days and best days) seem to occur close together temporally.
Last edited by livesoft on Fri Feb 16, 2018 9:34 am, edited 3 times in total.
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AlohaJoe
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Re: Reality of the market being "down"...

Post by AlohaJoe » Fri Feb 16, 2018 9:32 am

Google, Yahoo, Morningstar, and Bloomberg are some of the well known providers of information on the markets. You can check the numbers with them and see what they say.

vaught
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Re: Reality of the market being "down"...

Post by vaught » Fri Feb 16, 2018 10:06 am

Thanks. After looking elsewhere it looks like the "high" that was shown on my phone was incorrect. It looks like, similar to DOW and Nasdaq, that is is only "down" about 5.7% from an all time high. So the point remains the same. We are still at a near all time high in the stock market.

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goingup
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Re: Reality of the market being "down"...

Post by goingup » Fri Feb 16, 2018 10:18 am

vaught wrote:
Fri Feb 16, 2018 10:06 am
So the point remains the same. We are still at a near all time high in the stock market.
I like how you tried to give perspective to your friend. When I consider our portfolio losses, it's less painful to use %'s rather than $$'s. Even less painful to consider YTD benchmark, rather than "all time high".

Could be your friend needs to dial back risk a little, but that's a different conversation!

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FrugalInvestor
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Re: Reality of the market being "down"...

Post by FrugalInvestor » Fri Feb 16, 2018 10:21 am

There is always a lot of 'dooming and glooming' in the financial press which works well for advisors and firms that get paid to help people do something to 'protect' their money. Your friend is paying attention to this noise. Ironically, doing nothing would usually be much better for the financial health of most people including your friend in the long term which is why the term 'ignore the noise' is often used by Bogleheads (see my avatar). Doing nothing is most often better than doing something in response to the noise. As Jack Bogle so succinctly put it, "don't just do something, stand there."
Last edited by FrugalInvestor on Fri Feb 16, 2018 10:25 am, edited 1 time in total.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

dbr
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Re: Reality of the market being "down"...

Post by dbr » Fri Feb 16, 2018 10:25 am

vaught wrote:
Fri Feb 16, 2018 9:26 am
I have an older friend that is much much much closer to retirement than I am. He was upset about how "down" the market has been lately.

One of the fundamentals of investing is recognizing what it means to hold something the value of which fluctuates significantly while on average having an upward trend where even the trend is variable. Without some sort of ability to comprehend what that looks like conversation about the market being up or down or that one has gained or lost something is meaningless conversation and irrational thought. I am not sure what the method is for appreciating how this works, but I know that somehow absorbing these facts is essential for someone to make sense of investing.

And last question - as someone who tries to follow the simple bogleheads index portfolio (VG Extended Market Index (VEXAX), VG 2055 (VFFVX), VG LifeStrategy Growth (VASGX), VG 2050 (VFIFX), VG 2060 (VTTSX), VG Large Cap Adm (VLCAX), VG Mid Cap Adm (VIMAX), VG Small Cap Adm (VSMAX) and VG Total Stock Mkt Adm (VTSAX), is there one of the above that I should pay more attention to that would be more reflective of how my various funds are doing on a daily basis? I do log in and check them monthly but am able to check the exchanges daily from my phone (and I just check it out of curiosity; I don't let it affect my mood or investment decisions).

As mentioned above about benchmarks, if you hold a portfolio of index funds, then you have an index portfolio and could pay attention to the relevant indices less expenses. If you want to track you portfolio on a daily basis you just download the daily quotes (or type them in) to a spreadsheet and tabulate what you have. Doing that on a daily basis means nothing, so I don't know why someone would do that except as a form of habitual account maintenance. I can't imagine looking at the quote for VTSAX, for example, on a daily basis for any practical purpose.

RRAAYY3
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Re: Reality of the market being "down"...

Post by RRAAYY3 » Fri Feb 16, 2018 10:30 am

i'm considered the "investment guy" at work [it blows my mind that i was once as financially illiterate at my co-workers, thanks BH] - several people came up to me somewhat mockingly as if a couple weeks ago was a financial meltdown that left me living under a bridge.

my response: [brief chuckle] "I'm fine, actually I bought more. Oh, and we're pretty much at where we started the year - January was a meteoric rise that made this recent downturn sound a lot worse than it was. Now would actually be a good time to buy in if you'd like to do so. Have a good weekend."

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bostondan
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Re: Reality of the market being "down"...

Post by bostondan » Fri Feb 16, 2018 1:02 pm

RRAAYY3 wrote:
Fri Feb 16, 2018 10:30 am
i'm considered the "investment guy" at work [it blows my mind that i was once as financially illiterate at my co-workers, thanks BH] - several people came up to me somewhat mockingly as if a couple weeks ago was a financial meltdown that left me living under a bridge.
I had several similar experiences at work. One person told me she was glad she hadn’t bought index funds over a year ago when I suggested she do so, now that the market had “crashed.” I tried to gently inform her that we were still well above prices at that time.
“There may be times when we are powerless to prevent injustice, but there must never be a time when we fail to protest.” - Elie Wiesel

Pete3
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Re: Reality of the market being "down"...

Post by Pete3 » Fri Feb 16, 2018 1:17 pm

The DOW is not an exchange, Dow Jones Industrial Average is an index.

The Nasdaq is an exchange, the Nasdaq composite is an index,

NYSE is an exchange, the NYSE composite (NYA) is an index, the ATH is 13,637.02 https://finance.yahoo.com/quote/%5ENYA

RRAAYY3
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Re: Reality of the market being "down"...

Post by RRAAYY3 » Fri Feb 16, 2018 1:20 pm

bostondan wrote:
Fri Feb 16, 2018 1:02 pm
RRAAYY3 wrote:
Fri Feb 16, 2018 10:30 am
i'm considered the "investment guy" at work [it blows my mind that i was once as financially illiterate at my co-workers, thanks BH] - several people came up to me somewhat mockingly as if a couple weeks ago was a financial meltdown that left me living under a bridge.
I had several similar experiences at work. One person told me she was glad she hadn’t bought index funds over a year ago when I suggested she do so, now that the market had “crashed.” I tried to gently inform her that we were still well above prices at that time.
Ha, same! I bought at the “all time high” last March ... it’s still up even after this “crash”

People just don’t get it and/or can’t look beyond recency bias

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