Comparing the performance of the Nasdaq to that of the S&P 500 and the Dow Jones industrial Average over the last 10 years all on the same chart
Category: Nasdaq, S&P 500 and Dow Jones Industrial Average (DJIA)
Date: 31 January 2022 We compare the performance of the NASDAQ, S&P 500 and Dow Jones Industrial Average (DJIA) over the last 10 years. Over the longer term the NASDAQ has easily outperformed the S&P 500 and Dow Jones. But in recent times the NASDAQ has experienced a few days of very sharp declines compared to the Dow Jones and the S&P 500. We do believe the Nasdaq is far more overvalued than other US market indices.
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To avoid suffering significant losses should the stock markets pull back as we expect them to do we recommend ensuring your portfolio has less exposure to riskier and more volatile stocks and greater exposure to defensive stocks such as health and medical, food retailers and the likes. "
Comparing the NASDAQ, Dow Jones and S&P 500 over the last 10 years on one chart
The graphic below shows the performance of the Dow Jones Industrial Average (DJIA) index over the last month. As soon as a user clicks on the Nasdaq or S&P500 the graphic recalculates and shows the returns of the additional indices selected. The graphic will recalculate the returns if users provide their own dates, within the last 10 year (or they can select predefined dates from our Zoom box in the graphic). Data for the graphic obtained from MacroTrends.Net
Performance of the major US market indices over various time periods
This section will take a look at the performance of the NASDAQ, Dow Jones and the S&P 500 over various time periods including the last week, month, year and over the last 10 years
1 week:
1 month:
Year to Date (YTD):
1 year:
5 years:
10 years:
1 week:
- Dow Jones Industrial Average (DJIA): 1.34%
- S&P500: 0.77%
- NASDAQ: -3%
1 month:
- Dow Jones Industrial Average (DJIA): -4.6%
- S&P500: -7.3%
- NASDAQ: -15.2%
Year to Date (YTD):
- NASDAQ: -14.65%
- S&P500: -7.1%
- Dow Jones Industrial Average (DJIA): -4.4%
1 year:
- NASDAQ: -3.6%
- S&P500: 14%
- Dow Jones Industrial Average (DJIA): 11.5%
5 years:
- NASDAQ: 137.8%
- S&P500: 94.5%
- Dow Jones Industrial Average (DJIA): 74.8%
10 years:
- NASDAQ: 374.6%
- S&P500: 237.7%
- Dow Jones Industrial Average (DJIA): 174%
NASDAQ easily outperforms the Dow Jones and S&P 500 over most time periods
So from the interactive chart and summary above it is clear that the NASDAQ has easily outperformed the Dow Jones and S&P 500 over most time periods looked at. In general we believe the markets are horribly overvalued and stock market prices have been pushed up by loads of free money (read stimulus cheques). This has created a lot of artificial demand for stocks, crypto currencies and NFT's as people look to use their stimulus cheques to make more money from it.
World economies have taken the biggest hit since the financial crises, in fact the Covid-19 related lockdowns have hurt economies across the world far more than the financial crises yet markets are trading at all time highs? How can this make any sort of sense? The only true explanation is to much excess cash flooding the markets. And this is how a bubble is formed and at some people the bubble will pop.
While we believe all three major US stock market indices are horribly overvalued we do believe that the NASDAQ is the most overvalued of them all. The NASDAQ is loaded with large tech stocks and most of these are trading at extremely lofty valuations which has very rosy assumptions regarding the future earnings potential of these firms. Any revenue or profit expectations misses by any of these firms could see their stock prices plummet at a rapid pace as markets realise that tech stock valuations have gotten out of control. And the strong decline in the Nasdaq compared to the Dow Jones (DJIA) and the S&P 500 in recent weeks is proof that market participants are starting to realise that the Nasdaq is horribly overvalued when compared to some of the other market indices
To avoid suffering significant losses should the stock markets pull back as we expect them to do we recommend ensuring your portfolio has less exposure to riskier and more volatile stocks and greater exposure to defensive stocks such as health and medical, food retailers and the likes.
World economies have taken the biggest hit since the financial crises, in fact the Covid-19 related lockdowns have hurt economies across the world far more than the financial crises yet markets are trading at all time highs? How can this make any sort of sense? The only true explanation is to much excess cash flooding the markets. And this is how a bubble is formed and at some people the bubble will pop.
While we believe all three major US stock market indices are horribly overvalued we do believe that the NASDAQ is the most overvalued of them all. The NASDAQ is loaded with large tech stocks and most of these are trading at extremely lofty valuations which has very rosy assumptions regarding the future earnings potential of these firms. Any revenue or profit expectations misses by any of these firms could see their stock prices plummet at a rapid pace as markets realise that tech stock valuations have gotten out of control. And the strong decline in the Nasdaq compared to the Dow Jones (DJIA) and the S&P 500 in recent weeks is proof that market participants are starting to realise that the Nasdaq is horribly overvalued when compared to some of the other market indices
To avoid suffering significant losses should the stock markets pull back as we expect them to do we recommend ensuring your portfolio has less exposure to riskier and more volatile stocks and greater exposure to defensive stocks such as health and medical, food retailers and the likes.
One of the biggest stock price bubbles in recent years is that of Tesla (TSLA). We really do not know how people are parting with their cash for Tesla shares at its current price. And Tesla is just one of many hundreds of examples of tech related stocks that are horribly overvalued. Be careful when investing in the markets at its current lofty valuations.
President Biden became the president of the USA with the markets at all time highs and trading at ridiculous multiples. It will affect his performance once he is done as president as markets are at a very high base and we doubt stock market returns will be anything to write home about after his presidential term is over, purely based on the facts that the markets are priced at extremely expensive levels and we cannot really see it moving substantially higher in coming years.
Rising inflation will push the Fed to raise interest rates which in turn will cool US economic growth, company profits and in turn stock market performance. While the FED keeps yapping on about inflation being transitory due to supply chain and logistic issues, we believe higher inflation is here to stay, at least for a a lot longer than the Fed anticipated. And that means higher interest rates in the US are due and will stay in place for a lot longer than most consumers are expecting or would want it to be.
Best to tighten your spending belts, look for defensive stocks that pay strong and increasing dividends.
President Biden became the president of the USA with the markets at all time highs and trading at ridiculous multiples. It will affect his performance once he is done as president as markets are at a very high base and we doubt stock market returns will be anything to write home about after his presidential term is over, purely based on the facts that the markets are priced at extremely expensive levels and we cannot really see it moving substantially higher in coming years.
Rising inflation will push the Fed to raise interest rates which in turn will cool US economic growth, company profits and in turn stock market performance. While the FED keeps yapping on about inflation being transitory due to supply chain and logistic issues, we believe higher inflation is here to stay, at least for a a lot longer than the Fed anticipated. And that means higher interest rates in the US are due and will stay in place for a lot longer than most consumers are expecting or would want it to be.
Best to tighten your spending belts, look for defensive stocks that pay strong and increasing dividends.
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