The Terrible. Horrible, No Good Year For Stocks And Pretty Much Any Asset Class
The Weekly YTD Report that I run in Erlanger Chart Room shows that only 24% of stocks are higher for the year and 76% are lower through last Friday's close.
Last week 31% of stocks were higher. At the beginning of September the number of stocks higher for the year was 55%. Clearly, tax selling is contributing to December losses after hitting the market for losses in October.
October sees the mutual funds decide whether to take tax losses for the year as they end their tax year on October 31st. Some also end their tax year on September 30th.
The average return of the stocks with positive returns is 31%. The average return of the stocks with negative returns is -32%. This is quite the spread. Almost unheard of in recent years,
The entire universe of 4607 stocks sees an average return of -17%. Once we conclude this year there should be a good chance of a pretty large counter rally as investors and speculators step in to buy stocks that have gotten hammered. This may be the biggest Christmas gift investors will see in quite some time.