A friend recently told me that an economist had told him that the market was underperforming based on the economist’s expectations. I totally disagree, I believe the Dow Jones Industrial Average’s fall was to be expected, thus, it is the economist and all the others who believed the market would keep humming along that had inflated expectations.
If you bought shares indexed to the Dow Jones Industrial Average on August 31, 2015 when the low was 15,979.95, you probably thought that you were too big for your britches when on November 2, 2015 it had an intraday high of 17,977.85, a gain of 12.5%. As of 10:45 am on January 20, 2016, the market has almost reached where I had expected it -on August, 25, 2016 – to close on August 30, 2016: 15,386.82. I know, I was off a handful of months, but I didn’t waiver in that the DJIA was going to impersonate a falling rock.
Now, I’m sure you are thinking, where do I think the market will go from here? Well, for a small fee I’ll tell you- I am kidding; OK, for an employment opportunity. I’ll modify what Reggie Jackson use to say about his role with the New York Yankees and apply it to China: China is the straw that stirs the economy. Yes, oil’s drop is also a contributing factor as Saudi Arabia continues to pump oil disregarding the drop in prices, even when Iran’s production will further glut the market. The drop in commodity prices, excluding oil, has also contributed to this economic meltdown. Drum roll please, I still believe the market will drop some more. I would also like to discuss my views on individual stocks, but I don’t have the requisite time. After all, this is just a blog, and not a financial newsletter-for now.