Market coming up on 2 years of flat.

[papadad111]

Even if the indices are flat, if the market has a 2% dividend yield it's beaten the pants out of being in cash.

+1. Yep.

Over the course of the last approx two years, mr market is up total of 2% in cap gains and 5% on dividends offset by around 4% inflation erosion. ... Net a 3% total gain or around 1.5% per year. Not stellar, but better than going in reverse... Which is what cash does.

And agree Gone4Good reference the international equities component being in reverse to the tune of around 5% real loss per year for the same period. (My intl fund for same period shows 9% loss, 5% dividend gains, 4% inflation).

W2R. Generally when looking at equities, I like to focus on the SP500 or Russell 2000 versus the Dow, (( Is a better cross section of stocks)).
The flat picture is really visible when viewing a 5 year of those broader indices as others have posted. Perhaps also visible on the DOW, but maybe not as pronounced. You're right that the volatility /VIX has been relatively calmer. For the SP500, over the past two years mr market has really been in the 1850-2150 range, <10% up or down which is considered low volatility.

NWB - yep. Sometimes timing the market can be profitable. For me, it's usually no better than B&H...

Senator - good points about a 20 year period of Japan style flat....


So.. we all sure hope for better alpha, but if not, we'll all be soon reconsidering our safe WR and wishing we had multiple streams of income to augment 2.5% dividends (in another year or two) if the flatness persists.

The market has been flat for extended periods before ... Perhaps good for accumulators. Less good for new retirees as this plays to SOR risk. I'll do a little digging to see how those flat periods ended.

Bull markets do tend to end in a fizzle... Or a whimper as it's often called. Perhaps this is what we are getting. That fizzle-out of this past 7 year bull...

 

[target2019]

The market has been flat for extended periods before ... Perhaps good for accumulators. Less good for new retirees as this plays to SOR risk. I'll do a little digging to see how those flat periods ended.

Lucky accumulator here. About one year ago I was feeling the flatness, and allowed myself to be sucked back into accumulator mode (aka w*rk).

 

[Lsbcal]

There is an awful lot of negativity around. Recently I saw an article about how 3 large Wall Street institutions were predicting a poor summer. Gives me hope that a good market period will spring from all this.

 

[dixonge]

+1. Yep.

Over the course of the last approx two years, mr market is up total of 2% in cap gains

Why are you cherry-picking your dates? If you go back two calendar years to May of 2014, you see the S&P 500 is up 9.2%. Not 2%. Not flat.

Yes, things have leveled off, a bit of a sideways market when you zoom out. This mostly doesn't matter if you are either A-still accumulating on a regular basis, or B-already retired. Keep a long-term view.

 

[NW-Bound]

Yes, I believe that the market will be see-sawing for the immediate future. So, what do I do?

I try to enhance my yield a bit by doing a bit of trading at the 5 to 10% dip, or writing call or put options when I feel is appropriate. I am chicken so usually commit only 5 to 10% of capital. If the lark returns another 1% return to the total portfolio, I consider myself successful.

 

[Lsbcal]

Why are you cherry-picking your dates? If you go back two calendar years to May of 2014, you see the S&P 500 is up 9.2%. Not 2%. Not flat.

Yes, things have leveled off, a bit of a sideways market when you zoom out. This mostly doesn't matter if you are either A-still accumulating on a regular basis, or B-already retired. Keep a long-term view.

Just a bit of a quibble but in the same direction as your post Dixonge. From May 1, 2014 to May 1, 2016 my data shows 14% gain which includes dividends. Actually this is from the Vanguard SP500 fund VFIAX.

 

[Fedup]

I made money since I discovered the ETFs. In the past I only buy mutual funds. But I keep my AA in mind as I trade. I won't take a large portion on anything. My account is at the highest ever and it was the highest ever last year. I took my profit this year to go on travel. This amount of money is on top of my $40k budget, I allows me to spend on anything I like., maybe stinking cheese. But this is my after tax account, so the downside is I have pay tax. It's ok, I don't mind paying tax if I make money.

 

[papadad111]

Why are you cherry-picking your dates? If you go back two calendar years to May of 2014, you see the S&P 500 is up 9.2%. Not 2%. Not flat.

Yes, things have leveled off, a bit of a sideways market when you zoom out. This mostly doesn't matter if you are either A-still accumulating on a regular basis, or B-already retired. Keep a long-term view.

Not really cherry picking - I selected 2000 on the SP500 which is a nice round number that it hit almost 2 years ago. Major fanfare --kinda like rolling 100k on the car odometer in the old days !

So... Selecting a significant and well followed and well quoted market index value / market index level to me is not cherry picking ...

Not a cherry picking of a date.

As my first post noted, we are almost 2 years since the SP500 hit 2000...or as I said in my post. 2K. The 2K grind to be exact.

Edit: forgot to mention that my last big contribution was around that 2000 SP500 market level too. Fired after than and It's drawdown since. FIRE rocks.

Also, Maybe I have a propensity for that 2000 number the same way some people love to talk YTD returns ( cherry picking a year end to year end date span).

I just happen to focus more on significantly followed index/market levels.

Market Record high to record high is another good one (admittedly also arbitrary) that I like .

for those invested in buy and hold and not deploying new capital, those numbers matter (because market timing, DCA'ing etc is not occurring).

 

[haha]

Please let this be true.

Everyone in the forum, repeat after me, "This is a consolidation phase, and will start going up a bunch very soon".

Well, perhaps would be nice, but IMO it would be extremely unlikely.

I believe we are in for some rough weather. Why would S&P make a big and sustained up-move? It is already quite overvalued by the only reliable long term value metrics, CAPE and Q. I am trying to rid myself of any equities where the sure loss from paying capital gains is not greater than the likely but less than sure loss from sitting tight and accepting a drawdown. Lasting stalls at high levels are usually bad juju.

Ha

 

[audreyh1]

Well, IMO, the S&P500 really got ahead of itself in 2013, so we've spent the following years trying to digest the overindulgence.......

 

[Mulligan]

Well, perhaps would be nice, but IMO it would be extremely unlikely.



I believe we are in for some rough weather. Why would S&P make a big and sustained up-move? It is already quite overvalued by the only reliable long term value metrics, CAPE and Q. I am trying to rid myself of any equities where the sure loss from paying capital gains is not greater than the likely but less than sure loss from sitting tight and accepting a drawdown. Lasting stalls at high levels are usually bad juju.



Ha

Ha, you are kind of becoming a nervous nellie investor like me. I should have dragged you kicking and screaming into the utility preferreds a few years ago when I jumped head first into the deep water. The past few years has been a total snoozefest while collecting the 6-7% divis every 3 months. These have helped keep the stress inducing wrinkles at bay.

 

[dixonge]

Not really cherry picking - I selected 2000 on the SP500 which is a nice round number that it hit almost 2 years ago. Major fanfare --kinda like rolling 100k on the car odometer in the old days !

So... Selecting a significant and well followed and well quoted market index value / market index level to me is not cherry picking ...

gotcha

 

[NW-Bound]

Well, IMO, the S&P500 really got ahead of itself in 2013, so we've spent the following years trying to digest the overindulgence.......

No problem. The Fed is going to help by giving it a dose of Pepto Bismol. Or is it Miralax?

 

[papadad111]

There was an article on flat market in CNBC today. It was for Pro subscribers only so I couldn't read all of it. Here were the first two paragraphs.

"Since peaking out at 2,130.82 (on a closing basis) last May, the S&P 500 has seen its share of volatility. Despite the big swings, though, the index is currently within 3 percent of that all-time closing high from one year ago. Come this weekend, though, the S&P 500 will have gone a year without making a new 52-week high. While that may not sound like much, given that 2014 saw the fifth most daily closes at an all-time high on record, it has been a bit of an adjustment period for investors. "

Stocks have gone nowhere for almost a full year, but that may be a good thing http://www.cnbc.com/id/103642859
http://www.cnbc.com/id/103642859

 

[audreyh1]

There was an article on flat market in CNBC today. It was for Pro subscribers only so I couldn't read all of it. Here were the first two paragraphs.

"Since peaking out at 2,130.82 (on a closing basis) last May, the S&P 500 has seen its share of volatility. Despite the big swings, though, the index is currently within 3 percent of that all-time closing high from one year ago. Come this weekend, though, the S&P 500 will have gone a year without making a new 52-week high. While that may not sound like much, given that 2014 saw the fifth most daily closes at an all-time high on record, it has been a bit of an adjustment period for investors. "

Stocks have gone nowhere for almost a full year, but that may be a good thing Long, sideways market periods lead to big gains
Long, sideways market periods lead to big gains

That dovetails with my personal experience of it being a year....

 

[Looking4Ward]

"Market coming up on 2 years of flat" and I'm coming up on 2 years since I ER'd.

Coincidence? I think not.......

 

[CaliforniaMan]

"Market coming up on 2 years of flat" and I'm coming up on 2 years since I ER'd.

Coincidence? I think not.......

I love it!

 

[Lakewood90712]

No tree grows to the sky.

We need a sharp , ugly drop to shake out the weak , and a healthy solid recovery without endless QE and other stimulus. Let the markets run as intended , and return to capitalism, not this clone of the Japanese economic model we have , IMO.

Plenty of opportunity will occur during normal economic cycles.

 

[pb4uski]

Not flat, but not real inspiring. $10k invested in Total Stock Adm on 5/18/14 would be worth $11,175 on 5/17/16 so a 5.875% simple return, perhaps a bit less with compounding... not great but not flat either.

 

[Gone4Good]

No problem. The Fed is going to help by giving it a dose of Pepto Bismol. Or is it Miralax?

I guess you're talking about this from yesterday's Fed Minute's release. . .

Fed Is Seriously Considering Raising Interest Rates in June, Meeting Minutes Say

Or maybe this from two days ago . . .

Consumer Prices Climb 0.4% in April

I'd say the most likely Fed action is to raise rates. If the economy starts to look squishy, they'll hold. Only if things turn down will they cut.

Not sure how any of that is bullish for equities.

 

[NW-Bound]

It was a sarcastic joke.

 

[mathjak107]

on an inflation adjusted basis the s&p 500 has averaged about 1.83% the last 15 years . one dollar is 1.34 adjusted for inflation .

 

[papadad111]

Not flat, but not real inspiring. $10k invested in Total Stock Adm on 5/18/14 would be worth $11,175 on 5/17/16 so a 5.875% simple return, perhaps a bit less with compounding... not great but not flat either.

See original post - I didn't pick a certain date, but rather when the SP500 first crossed the 2000 level.

It was first hit almost 2 years ago ( in July 2014) and here we are 2 years later pretty much at that same 2000 level.

Yes saw an up leg to 2131 and a down leg to around 1850 but it's been within that band now for 2 years now... And we've not seen a new market high in a year...

The bull usually ends with a whimper. I think we're whimpering ....

 

[papadad111]

on an inflation adjusted basis the s&p 500 has averaged about 1.83% the last 15 years . one dollar is 1.34 adjusted for inflation .

Is that the geometric or arithmetic average inflation adjusted return ?

 

[Hopeful]

Considering we own a good chunk of Apple (sub 10%), the last two years have been pretty flat for us.