Apple is ~15% off its all time high as it lags its large cap peers. Concerns of iPhone growth and China have rattled investors. However, it’s not unusual for this stock to pull back. Since 2107, we have seen 11 retraces – offering patient investors buying opportunity. From my lens, Apple is a reasonable long-term buy around $165. And if you can get it cheaper – add to it. Over the next 3 years – I think it will be well over $200 as earnings top $8.00 per share.
Three Cheers for 5,000!
This week the S&P 500 closed above 5,000 for the first time. Another milestone as we climb the ‘wall of worry’. Over the past 100+ years the S&P 500 has averaged capital gains of ~8.5% per year plus dividends of ~2.0%. That’s a total return of close to 10.5% (on average). If you compound 10.5% per year over 20 years (i.e., ‘CAGR’) – that’s a 637% increase. But as we know, the pathway is rarely smooth. Some years the market may “add 20%” and others it could give back a similar margin (or worse). And we saw this happen recently. However over the long run – markets will rise more often than they fall.
2023 – The Year in Review
2023 has come to a close… and what a year it was. For many, it will go down as one of the more challenging. For others, they will have banked some very attractive gains. In short, the S&P 500 recovered from its worst year in over a decade – finishing the year 24.2% higher. As for myself, my portfolio returned 19.63%. I made some errors this year (which I will discuss) but also had a couple of wins. Net-net – it was a solid year given the unchartered waters we were navigating.
People Choose What They Want to Hear
Markets continue their ascent after a blistering November. The Dow and S&P 500 each gained ~9% for the month – in what is typically a seasonally strong time of year. From a year-to-date perspective, the Dow is up 8.5%, the S&P 500 is up ~19% and the Nasdaq up over 35%. The anomaly? 493 of the 500 stocks on the S&P 500 are barely positive for the year (i.e., the equal weighted index). So what’s driving the optimism? Simple: the expectation of lower yields and the Fed hitting its terminal rate. This post looks at potential blind spots for the market.
For a full list of posts from 2017…