Top advice from top U.S. investorsFebruary 17, 2023 2023-02-17 15:19
Top advice from top U.S. investors
Top advice from top U.S. investors
Many newcomers to the market dismiss the option of buying index funds. But, as statistics show, they are wrong. The S and P 500 chart live contains both high-priced and low-priced stocks. Because of this, the index better reflects the U.S. stock market, so it is even called a barometer of the U.S. economy.
The index consists of 11 sectors, with IT being the largest sector at 27.8% (as of July 30). The IT sector is far ahead of second and third place health care (13.4%) and consumer staples (12.1%). The top 10 companies account for 27.6% — mostly tech giants, among them: Apple, Microsoft, Amazon, Facebook, Alphabet (Class A and C), Tesla, Berkshire Hathaway, Nvidia, and JP Morgan.
Chart SP500 historical: analyst estimates
Experts at investment firm BTIG point out that an “epic emotional” rally would begin if the S&P 500 index reaches 4,500 points. It could lead the market up 5% or more over the next week or two.
Moody’s and Morgan Stanley
However, not all investment houses are so optimistic. Moody’s and Morgan Stanley warned investors of the risks of a 15-20% correction in the S and P 500 chart live. As triggers, analysts cited a possible tightening of monetary policy from the Fed and inflated multiples on stocks.
Ray Dalio recommends the following asset allocation:
40% — long-term bonds (maturity of ten years or more);
30% — stocks;
15% — medium-term bonds (5-10 years);
7.5% — gold;
7.5% — commodities.
Peter Mullan, president of Creative Planning Investment Fund: “With these 500 stocks, you will own about 80% of the market capitalization of the entire U.S. market. In addition, you will have a global presence because these companies get most of their revenues overseas: McDonald’s has stores in China and Walmart has stores in Europe. So you get an inexpensive diversified portfolio of investments in the global economy. \\
A “golden cross” has formed on the chart of the S&P 500. What does this mean for the market?
A “golden cross” indicator occurs when the short-term moving average of an asset crosses and exceeds the long-term moving average. This is usually considered a signal for further market growth.
The S&P 500 index rose more than 3% last week, peaking at 4,195.44 points. The U.S. Federal Reserve’s decision to raise its key rate by 25 basis points to 4.5-4.75% per year, as well as a slowdown in inflation sparked the surge in the U.S. stock market. The Consumer Price Index (CPI) fell from 7.1% to 6.5% year-over-year in December 2022.
The rally in the stock market led to the emergence of a rare technical analysis pattern called the golden cross.. This figure usually appears late in a recession or during signs of economic recovery, Bank of America experts noted.
“Golden Cross” is a graphical pattern that represents the intersection of short-term and long-term moving averages from bottom to top. Typically, the indicator uses the 50-day moving average as the short-term average and the 200-day moving average as the long-term average.
Ryan Dettrick, chief market strategist at Carson Group consulting company, pointed out that the S&P 500 index rose in the next 12 months 15 out of 16 times when the indicator charted a “golden cross. The average annual return on that rise was 15.7%, the average six-month return was 9.8%; the average three-month return was 6.7% and 1.9% for the month.