As we enter the final weeks of 2018, the stock market is not enjoying a Santa Claus rally. Whatever slims gains the major indexes had entering the last month of the year have evaporated.
According to data compiled by @OddStats from Stooq.com, 2018 is on pace to be the first year in the S&P 500’s history that the index was up at least 3% year to date at the end of November and ended the year negative (on an index basis, not total return).
AAII Weekly Survey Question
After starting off with so much promise in light of the new tax law, a strong U.S. economy and robust corporate earnings, things haven’t turned out as most investors were expecting (or hoping).
Last week’s reader question asked:
Looking back on 2018, have your investments done better or worse than you expected at the start of the year?
Here are the results of the survey:
In all, 1,720 readers participated.
Probably not surprising, nearly three-quarters (73%) of those responding say that their investments have not performed as well as they were expecting this year. The majority of our readers—64%—say they don’t plan to change their spending habits compared to last year and, instead, expect to spend about the same this holiday season as last year.
One-fifth (20%) of our readers say their investment performed about as well as they expected this year while the remaining 7% were fortunate enough to have their investment perform better than what they were expecting at the start of 2018.
Weekly Special Question
Following up, last week’s special question asked out readers:
What was your biggest investment success and failure this year?
In all, we received 216 responses.
The answers were varied and covered a broad range, from individual investments to broader strategies. On the success side, the biggest single strategies were not panic selling and holding more cash than usual.
As far as sector investing go, the two biggest success stories among our readers were utilities and health care.
Looking at individual stocks, Merck (MRK) and Microsoft (MSFT) were cited the most as far as top stocks for 2018 among our readers.
On the failure side of the equation, General Electric (GE) was the overwhelming choice by nearly three-to-one. IBM was the second-most-disappointing individual stocks among our readers. Emerging markets were also a top vote-getter.
Here is a sampling of the top investment success stories and failures for 2018 from our readers:
- “International investments underperformed.”
- “Fixed income investments did worse than expected while healthcare did better.”
- “I don’t look at it in terms of success and failure in the short-term. I have solid funds which I am staying invested in. I did reduce my equity exposure a bit before the market slide so that was good.”
- “A well-diversified portfolio makes all the difference. Low fee mutual funds and not doing a lot of trading all the time. I do not overreact to bounces and hold a year’s worth of cash for emergencies.”
- “My biggest successes were having a portfolio of dividend-paying stocks that provided a good amount of income along with the proceeds of covered call options.”
- “I only had small positions in the FAANG stocks so I avoided the tech sell-off. While I do have a well-diversified portfolio, I was slightly overweight in some REITs that performed well. I am down from the January high but managed to outperform the S&P 500 by a good margin.”
- “Stay the course.”
And perhaps the best response to all of our blog questions for the year:
- “(To the tune of Toto’s Africa) It’s gonna take a lot to drag me away from you There’s nothing that a hundred dollars or more could ever do I bless the rains down in Wall Street I bless the rains down in Wall Street (I bless the rain) I bless the rains down in Wall Street (I bless the rain) I bless the rains down in Wall Street I bless the rains down in Wall Street.”
Everybody has an opinion! Why not give us yours? Participate in our weekly member poll, updated every Monday, and see the results online at www.aaii.com/memberquestion.