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Going
Nowhere
Brian
Trumbore
President/Editor, StocksandNews.com
Some of my friends in the financial
services industry may not be too fired up over this
little piece, but despite the big rally we've seen
in the equity markets, particularly off the October
2002 lows, there are some respected voices such as
that of John Bollinger (a leading technician) who
believe we have entered a long period of stagnant,
narrow, range-bound market action? 5-10 years worth,
perhaps.
No
way, you might be thinking, but there have been other
prolonged periods where investors tired of equities
and economic trends weren't always favorable. I'm
not saying this will be the case for the next decade,
but one thing is clear:
Equities
may be in favor today, thanks in large part to pitifully
low bond yields and the lack of competition for the
investment dollar, but once rates start heading back
up, as is now the case in Australia and Britain, investors
may seek other alternatives to the stock market, especially
if the market averages themselves stagnate.
What
follows below is a graphic illustration of how trends
can persist for years, in this case 16 years, despite
inevitable bumps along the way such as in the bear
market of '73'-74. Today, these bumps could be precipitated
by a terror attack on a key global city or state (New
York, Los Angeles, London, Paris, Tokyo, etc.).
Add
a 'zero' to the actual Dow Jones Industrial Average
figures below and you get a better picture of what
I'm talking about. As I write this, we sit at about
Dow 9800. Many think we could trade between 8000 and
12000 for the foreseeable future.
But,
importantly, even if this were to be the case, actual
returns on stocks could still be significant if you
are in the right sectors at the right time...meaning,
not just cyclical vs. growth, for example, but also
large cap vs. small.
[Month
end closing #'s for the DJIA]
12/65?969
1/66?..983
2/66?..951
3/66?..924
4/66?..933
5/66?..884
6/66?..870
7/66?..847
8/66?..788
9/66?..774
10/66?807
11/66?791
12/66?785
1/67?..849
2/67?..839
3/67?..865
4/67?..897
5/67?..852
6/67?..860
7/67?..904
8/67?..901
9/67?..926
10/67?879
11/67?875
12/67?905
1/68?..855
2/68?..840
3/68?..840
4/68?..912
5/68?..899
6/68?..897
7/68?..883
8/68?..896
9/68?..935
10/68?952
11/68?985
12/68?943
1/69?..946
2/69?..905
3/69?..935
4/69?..950
5/69?..937
6/69?..873
7/69?..815
8/69?..836
9/69?..813
10/69?855
11/69?812
12/69?800
1/70?..744
2/70?..777
3/70?..785
4/70?..736
5/70?..700
6/70?..683
7/70?..734
8/70?..764
9/70?..760
10/70?755
11/70?794
12/70?838
1/71?..868
2/71?..878
3/71?..904
4/71?..941
5/71?..907
6/71?..891
7/71?..858
8/71?..898
9/71?..887
10/71?839
11/71?831
12/71?890
1/72?..902
2/72?..928
3/72?..940
4/72?..954
5/72?..960
6/72?..929
7/72?..924
8/72?..963
9/72?..953
10/72?955
11/72?1018
12/72?1020
1/73?..999
2/73?..955
3/73?..951
4/73?..921
5/73?..901
6/73?..891
7/73?..926
8/73?..887
9/73?..947
10/73....956
11/73?822
12/73?850
1/74?..855
2/74?..860
3/74?..846
4/74?..836
5/74?..802
6/74?..802
7/74?..757
8/74?..678
9/74?..607
10/74?665
11/74?618
12/74?616
1/75?..703
2/75?..739
3/75?..768
4/75?..821
5/75?..832
6/75?..878
7/75?..831
8/75?..835
9/75?..793
10/75?836
11/75?860
12/75?852
1/76?..975
2/76?..972
3/76?..999
4/76?..996
5/76?..975
6/76.....1002
7/76?..984
8/76?..973
9/76?..990
10/76?964
11/76?947
12/76?1004
1/77?..954
2/77?..936
3/77?..919
4/77?..926
5/77?..898
6/77?..916
7/77?..890
8/77?..861
9/77?..847
10/77?818
11/77?829
12/77?831
1/78?..769
2/78?..742
3/78?..757
4/78?..837
5/78?..840
6/78?..818
7/78?..862
8/78?..876
9/78?..865
10/78?792
11/78?799
12/78?805
1/79?..839
2/79?..808
3/79?..862
4/79?..854
5/79?..822
6/79?..841
7/79?..846
8/79?..887
9/79?..878
10/79?815
11/79?822
12/79?838
1/80?..875
2/80?..863
3/80?..785
4/80?..817
5/80?..850
6/80?..867
7/80?..935
8/80?..932
9/80?..932
10/80?924
11/80?993
12/80?963
1/81?..947
2/81?..974
3/81?..1003
4/81?..997
5/81?..991
6/81?..976
7/81?..952
8/81?..881
9/81?..849
10/81?852
11/81?888
12/81?875
1/82?..871
2/82?..824
3/82?..822
4/82?..848
5/82?..819
6/82?..811
7/82?..808
8/82?..901 *776 low on 8/12?then off to the races?yippee!
9/82?..896
10/82?991
11/82?1039
12/82?1046
12/83?1258
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[Source:
"The Dow Jones Averages 1885-1995" Edited
by Phyllis S. Pierce]
Wall Street History returns 11/14.
Brian
Trumbore
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