Last edited Tue Aug 11, 2020, 12:44 AM - Edit history (1)
funds (and/or ETFs), only a portion of which might be a total U.S. stock market index fund and/or an S&P 500 index fund (which is close to a total U.S. stock market fund in composition and performance).
So some are going to do better, and some worse.
The conventional wisdom was that the Dow 30, being select "blue chip" stocks, was a less volatile and safer piece of the overall market. Turns out that at least as far as avoiding long recovery times, it wasn't such a safe group of stocks.
Nowadays some think that MOAT stocks and/or value stocks are a safer group of stocks than the overall market. And afficionados of the various segments of the market all have their euphoric narratives.
There are no guarantees of a short recovery time for every equity investment, even highly diversified ones. Especially beginning with runaway P/E ratios.
Q1 S&P 500 Earnings per share:
2017 Q1: 27.46,
2018 Q1: 33.02,
2019 Q1: 35.02,
2020 Q1: 11.88 👀 😲
https://ycharts.com/indicators/sp_500_eps
We don't have the full Q2 earnings yet. But likely to be a lot worse, given that Q1 GDP declined by 5%, and Q2 GDP declined by 32.9% (both on an annualized rate basis. The actual GDP drops were Q1: 1.3%, Q2: 9.5%). So it would be pretty much impossible for Q2 earnings to be anything but a lot worse than Q1 earnings.
It will be interesting to see an excuse for the Japanese stock market.
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