U.S. Asset Management

dow jones

USAM Dow Jones Industrial Average Target

By David Cross, CPM®, CRPC®, CDFA®

By David Cross, CPM®, CRPC®, CDFA®

David.Cross@us-am.com

The US stock market has fallen rapidly in response to investors seeking to reduce risk in the face of the uncertainty of the Coronavirus.  Bear in mind that as much at 80% or more of trading activity is done by machines, according to JP Morgan.

Computers today read news headlines and literally listen to the financial news for key words.  The keywords are assigned positive and negative values and the computers make trades based on the scores that the programmers coded into the algorithm and the trades are done in milliseconds with human discernment to follow later.

The good news is that because the computers “shoot first and ask questions later” we get an opportunity to benefit from the volatility – if we don’t panic.

We see dozens of opportunities surfacing as I write this.  For instance, if each stock in the Dow Jones Industrial Average hit its 1 year target, the Dow would be at about 31,500 in March 2021 or 25% higher.  The 1 year target reflects what the analyst believe a stock will be at the end of the designated period, in this case, 1 year. The last time we saw this opportunity was Christmas of 2018.

chart refinitiv

Source: US Asset Management with data from Refinitiv

CNN has a useful tool called the “Fear and Greed” Index.  A score near 0 means that investors are fearful and a score near 100 means that investors are being too greedy.  This morning, we hit single digits.

dow chart 2

The last time we saw single digits on Fear and Greed was at the market bottom at Christmas of 2018.  We bought in 2018 and we are looking to buy right now.  Opportunity knocking sometimes sounds unsettling.

fear greed 2018    

If you have questions about the market or your investments, we invite your questions.  Call us at 678-894-0696 or email us at david.cross@us-am.com

David Cross is a wealth advisor with U.S. Asset Management, a Registered Investment Advisor. He holds the designations of Certified Divorce Financial Analyst, Certified Retirement Planning Counselor and Certified Portfolio Manager.

US Asset Management

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Direct: 678-894-0696

david.cross@US-AM.com

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All views/opinions expressed in this article are solely those of the author and do not reflect the views/opinions held by Advisory Services Network LLC.  Advisory Services offered through U.S. Asset Management, a member of Advisory Services Network, LLC.

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U.S. Asset Management is a fiduciary advisor offering portfolio management and financial planning services. We help clients make better decisions with their money and assist with overseeing every aspect of their financial lives.  David Cross is a Certified Portfolio Manager, Certified Divorce Financial Analyst and Certified Retirement Planning Counselor.

U.S. Asset Management and Advisory Services Network, LLC do not provide tax advice.  The tax information contained herein is general and is not exhaustive by nature.  Federal and state laws are complex and constantly changing.  You should always consult your own legal or tax professional for information concerning your individual situation.

All information contained herein is derived from sources deemed to be reliable but cannot be guaranteed.  All economic and performance data is historical and not indicative of future results.  Indexes are unmanaged and do not incur management fees, costs, or expenses.  It is not possible to invest directly in an index.