March Madness starts today, so it seems as good a time as any to talk about rebounds, whether we’re discussing exchange traded funds (ETFs) or hoops.
As in basketball, no one really knows when a rebound is going to take place until it’s happened. And given the markets lately, Allen Sloan for The Washington Post points out that it isn’t helpful to note that the markets tend to rise in the very long-term.
But take a look at the following statistics and facts:
- The Wilshire 5000 , which is the broadest measure of the U.S. stock market, is down 51.4% from its peak in October 2007.
- Dividends, which once was used as a selling point for owning the broad stock market through an index, are being slashed at record rates.
- Money market funds are earning less than 1%
- Short term U.S. Treasury securities are returning nearly nothing and rates on long-term notes are so low that they might be in a bubble
All we can hope for is that the worst is behind us and the markets will start to bounce back and these devastating times will be behind us and something to read about in history books. We suggest that if you are going to get back into the market to watch the trend lines, don’t get over excited (or over-panicked), diversify, educate yourself and keep your own personal investment goals in mind.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.