Is one of your resolutions to figure out how to be more successful and less frustrated with your investment results?
Prior to the final two months of the year, the stock market was volatile and frustrating. If you weren’t correctly invested at the end of October, you missed out on most of the year’s gains (excluding the so-called “Magnificent Seven” stocks).
So, if your New Year’s resolution is to grow your nest egg and income in 2024 without worrying about timing the market or fretting what the markets do next…
The S&P 500 stock index is market-cap weighted, so the largest companies have the greatest effect on the index value. The mega-cap tech stocks—the Magnificent Seven—accounted for most of the S&P 500’s 25% return in 2023.
Let’s look at the Invesco S&P 500 Equal Weight ETF (RSP) to see how the average stock portfolio performed in 2023. This fund gives an equal weight to each of the 500 stocks in the S&P 500.
The RSV chart shows graphically how difficult it was for investors to generate profitable capital gains. It is human nature to chase share prices, which causes most investors to buy high and sell low.
And 2023 was better than 2022 for investors looking for capital gains. Here is the two-year chart for RSP:
Note that buy-and-hold investors had…
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