Dow jones at record high, but many stocks are not?

[The motor guy]

This is the first time I've had it where the dow Jones sees a significant increase and still haven't seen my portfolio go up much. It seems like it's only the bank stocks that are benefiting. Everything else is down

 

[supton]

What holdings do you have? Index funds or a collection of individual stocks?

 

[JavierH19]

It's because of the concentration. I'm still holding my dow position from september 2021 though it was painful seeing it be -16% a year later september 2022 but I figured the worst would just have to end and thankfully it did since it made me not want to check for months but now I'm up 25% though it took 3 years. I'm tempted to sell but I'm tempted to not sell since every time I thought I was gonna tank it doesn't. It might fall a bit but it gets back up and finds a new high.

 

[JeffKeryk]

The Dow is a stock market index of about 30 of the largest companies in the US. It is hardly representative if the overall market.
The S&P is bigger, but still weighted by the top companies.

 

[ecotourist]

The technology stocks are dragging the S&P 500 to record highs. Many stocks have not participated. The S&P 500 being drawn ahead by a very small number of stocks is actually a concern.

My equity investments have gotten ahead (I'm gladly accepting those gains!) so I'm currently re-balancing (ie selling Canadian and US equities and buying, in my case, Canadian bonds).

You might remember the old motto "buy low and sell high". No-one buys at the absolute bottom or sells at the absolute top but you can try and be approximately right. Stock market gains are terrific. I intend to keep some of them when the music stops.

 

[Dave Hess]

I’m at all time highs and things will keep grinding higher….. but I do think things might slow down mid 2025.

 

[Astro14]

This is the first time I've had it where the dow Jones sees a significant increase and still haven't seen my portfolio go up much. It seems like it's only the bank stocks that are benefiting. Everything else is down

1. Don’t watch the Dow.
2. Not everything else is down. Many sectors and individual stocks are up.
3. Without knowing your portfolio allocation, it’s impossible to discuss your results.

 

[macarose]

I've seen some of this myself but honestly, I've been seeing the same roller coaster ride for over 30 years.

There is a wonderful book called the Intelligent Asset Allocator by William Bernstein that can give you a lot of healthy detachment from the daily goings-on of the stock market.

I can't recommend it enough.

 

[JHZR2]

It’s been long known that in some of these indices, the top three or seven companies have had massive returns, while the rest are flat, or even negative. Then you have some single companies with valuation in excess of the GDP of major industrialized nations, and you know it’s funny business.

Unfortunately folks don’t have a choice but to play the game amidst the ridiculous nature of how it works.

 

[ecotourist]

I'm currently re-balancing (ie selling Canadian and US equities and buying, in my case, Canadian bonds).

For the record my current intended allocation is:
30% cash and bonds (mostly Canadian bonds but some US bonds as well)
25% Canadian equities
20% non Canadian, non US equities
25% US equities

Many people would say that's pretty aggressive for an old guy. But we hardly ever dip into our investments anyway so "we're letting 'er ride".

If you're wondering why all the Canadian bonds and equities, I'm a Canadian, I live in Canada and I mostly spend Canadian dollars.

A useful piece of advice I saw the other day was "come out of a bear market with the same allocation you had when the market dropped". I'd be comfortable with this allocation in a bear market. I might have to sell bonds and buy equities at some point.

 

[ecotourist]

I've seen some of this myself but honestly, I've been seeing the same roller coaster ride for over 30 years.

There is a wonderful book called the Intelligent Asset Allocator by William Bernstein that can give you a lot of healthy detachment from the daily goings-on of the stock market.

I can't recommend it enough.

Ah yes, William Bernstein the neurologist who couldn't find sensible financial advice anywhere, and so was forced to study markets and investing himself.

I learned a lot from his "Efficient Frontier" website as he was developing his theories. As I recall he just sort of stopped posting at some point. I haven't been back there for a number of years but William Bernstein and Efficient Frontier certainly had a big effect on my thinking. My hat is off to him.

 

[alarmguy]

... seems like it's only the bank stocks that are benefiting. Everything else is down

This is not correct. The market is broadly higher most all areas. But by far technology leads the way I would think in the tech heavy Nasdaq. It is true though, the DOW has not performed as well as the others.

Nothing is down though, never say nothing but it sounds like you need to be in index funds. Not so sure after this run up what would be the thing to do if you already missed out on the run up.

The returns are extremely high and cannot go on forever. I have a family member, retired couple, travels all over the world and do to their investment advisor has more money then they retired 10 years ago. I just learned this a couple days ago as I talked with them, I always joke and ask what state or country are they in this week. I wish I was as disciplined as they were in their earning years.

They live very well, outstanding family (married kids) too but it's kind of funny, you know? That Ramsey guy who says drive through a middle to upper middle class community, look at the cars they drive, the ones with the newest most fancy cars will never retire rich. Well, my family member always bought reasonable cars, mostly Hondas and would run them up to 200K ish miles before buying a new one. (ok I am rambling, I was just blow away by my conversation the other day, I know they lived good but had no idea they have more money now then they did when they retired, that is crazy because they are living life very well, Im ok but not like them)
The charts below are outstanding, index funds diversified between the three to me is the game to play.

 

[Slick3914]

The Dow is a useless index…it only represents 30 companies and it is price weighted

 

[Wireman1987]

This is the first time I've had it where the dow Jones sees a significant increase and still haven't seen my portfolio go up much. It seems like it's only the bank stocks that are benefiting. Everything else is down

not all stocks follow the Dow, you got the S&P Russell Nasdaq

 

[RhondaHonda]

This is not correct. The market is broadly higher most all areas. But by far technology leads the way I would think in the tech heavy Nasdaq. It is true though, the DOW has not performed as well as the others.

Nothing is down though, never say nothing but it sounds like you need to be in index funds. Not so sure after this run up what would be the thing to do if you already missed out on the run up.

The returns are extremely high and cannot go on forever. I have a family member, retired couple, travels all over the world and do to their investment advisor has more money then they retired 10 years ago. I just learned this a couple days ago as I talked with them, I always joke and ask what state or country are they in this week. I wish I was as disciplined as they were in their earning years.

They live very well, outstanding family (married kids) too but it's kind of funny, you know? That Ramsey guy who says drive through a middle to upper middle class community, look at the cars they drive, the ones with the newest most fancy cars will never retire rich. Well, my family member always bought reasonable cars, mostly Hondas and would run them up to 200K ish miles before buying a new one. (ok I am rambling, I was just blow away by my conversation the other day, I know they lived good but had no idea they have more money now then they did when they retired, that is crazy because they are living life very well, Im ok but not like them)
The charts below are outstanding, index funds diversified between the three to me is the game to play.
View attachment 250091View attachment 250092
View attachment 250093
View attachment 250094
View attachment 250095
View attachment 250096

I would think most people that had a decent size portfolio at retirement 10 years ago would have more now, as long as their spending didn’t increase exponentially or they weren’t heavy in bonds.

$2M in the S&P 500 for the last 10 years with dividends reinvested.

 

[JeffKeryk]

I would think most people that had a decent size portfolio at retirement 10 years ago would have more now, as long as their spending didn’t increase exponentially or they weren’t heavy in bonds.

Sure, especially the last few years and if they held tech.

 

[The motor guy]

Well I'd be doing good if my AAP stock didn't drop 50 percent in one day last year and still hasn't come back up. My Boing stock isn't doing very good either.

 

[The motor guy]

I'm almost tempted to go all in on Walmart stock. I don't see why it won't go back up to $170 like it was before the split

 

[ecotourist]

I would think most people that had a decent size portfolio at retirement 10 years ago would have more now, as long as their spending didn’t increase exponentially or they weren’t heavy in bonds.

I've been retired for 10 years as of the end of next January.

Over that almost 10 year period, with our conservative portfolios (30 - 40% in cash and bonds) while living very well, and not drawing much from our investments, we're up 68% as of last week.

During that 10 years we've travelled a bit (curtailed by the well known virus), bought a new Tesla Model 3, moved to an area with better weather, bought a somewhat more expensive retirement home, and have done extensive renovations to our retirement home.

That's an unbelievably good start to retirement. Fingers crossed.

 

[supton]

It’s ok to be tempted. It’s not ok to give into temptation. Make decisions based on facts and wisdom, leave gut calls to police shows.

What do you have available for funds you can invest in? is it limited due to being a 401k? or can you pick anything in the market. A retirement target index fund is a safe bet; there are S&P 500 index funds. If you are investing outside of typical tax deferred retirement vehicles, then picking an asset allocation with some percentage of bonds will be required to match your risk tolerance.