Stocks Analysis by Lance Roberts covering: Apple Inc, Vanguard Mega Cap Growth Index Fund ETF Shares. Read Lance Roberts's latest article on Investing.com
stocks dead? Maybe. But there are four reasons why they could be staged for a comeback. The recent market correction from the July peak certainly got investors’ attention and rattled the more extreme complacency. As we noted previously:it is essential to remember that low volatility represents a high “complacency” with investors. In other words, the longer the market moves higher without a significant correction, the more confident investors become.
“The bifurcation between the top 10 companies, as measured by market capitalization, and the other 490 stocks in the index has created an illusion of market bullishness. Despite the extremely crowded trade into the three sectors comprised of those ten stocks, we continue to see professional investors crowd into those shares at a record clip.”
companies, are driving most of the earnings growth. With the economy showing clear signs of deterioration, earnings of small and mid-cap companies remain the most vulnerable to changes in economic demand.this is not an insignificant factor supporting the rise in asset prices. Since 2000, corporate share buybacks have provided 100% of all theTherefore, it should be unsurprising that there is a high correlation between the ebbs and flows of corporate share buybacks and market performance.
While the 200-DMA is providing initial support to MGK, a failure of that support would bring a 50% retracement level into focus. Such would align with the lows of the April correction.we saw last week was unsurprising. However, as we suggested, given such a sharp rotation from recent highs, it may only be aremains elevated, historically not what is seen at corrective lows.Add or increase the duration of bond allocations, which tend to offset risk during recessionary downturns.
Vanguard Mega Cap Growth Index Fund ETF Shares
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