TRADERS FIND PATIENCE PAYS DLIM : ANALYSIS.Byline: Chet Currier Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. As they survey the charts of the stock market's gyrations through the first four months of 1997, devotees of the buy-and-hold school of investing feel they have been vindicated again. The zigzag path followed by the popular averages - up to record highs, down abruptly a·brupt adj. 1. Unexpectedly sudden: an abrupt change in the weather. 2. Surprisingly curt; brusque: an abrupt answer made in anger. 3. by about 10 percent, then back up again - has been full of pitfalls for everybody who trades stocks frequently. But most patient owners of the big-name blue chips who simply rode out the storm have been rewarded for their patience. If you bought an index fund investing in the Standard & Poor's 500-stock composite at New Year's and didn't look at it again until May Day, you could be very content to discover that you had a gain of better than 8 percent. Compounded over a full year, that works out to an annual return of 26 percent plus. ``The market has recovered nicely in recent trading,'' said Charles Carlson, market commentary editor at the investment advisory letter Dow Theory Dow Theory A theory which says the market is in an upward trend if one of its averages (industrial or transportation) advances above a previous important high, it is accompanied or followed by a similar advance in the other. Forecasts in Hammond, Ind. Nicely, indeed. On Monday, the Dow Jones industrial average Dow Jones Industrial Average The best known U.S. index of stocks. A price-weighted average of 30 actively traded blue-chip stocks, primarily industrials including stocks that trade on the New York Stock Exchange. jumped 143.29 points to 7,214.49, outstripping its former high by 129 points. The Dow has now recovered the ground it lost in the March-April sell-off and much more. ``While the specter of rising interest rates could short-circuit this rally, investors should remain focused on the market's bullish Bullish Word used to describe an investor's attitude. Bullish refers to an optimistic outlook, while bearish means a pessimistic outlook. bullish primary trend and continue to hold stocks,'' Carlson said. In fact, the ultra-long-term argument for collecting stocks, rather than trading them, has gathered powerful support all through the 1990s. As Alan Skrainka, chief market analyst at the investment firm of Edward Jones Edward, Eddie, or Ed Jones is the name of: Edward Jones:
``There has never been a recession in the U.S. economy that was not followed by a period of economic growth. There has never been a bear market in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. that was not followed by a bull market.'' But analysts like Skrainka acknowledge that successful investing isn't as easy at it looks when viewed with the advantage of hindsight hind·sight n. 1. Perception of the significance and nature of events after they have occurred. 2. The rear sight of a firearm. . Until Monday, the legions of investors who favor medium-size to smaller growth stocks has faced a much sterner test of patience than the blue-chip crowd has had to contend with. But the most spectacular sector during Monday's bull session was the performance of small-capitalization stocks. The Russell 2000 small-cap index rose 2.4 percent Monday and is up 7.1 percent since April 24. Still, unlike the blue-chip indexes, gauges of smaller stocks have lost ground, on balance, so far this year. |
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