SPY Up 0.2% and QQQ Down 1.6% in May

While May was a mostly flat month for stocks and bonds, SPY and QQQ are down sharply year-to-date. 

Daily chart where 12/31/2021 = 1000

SPY = SPDR S&P 500 ETF Trust 

QQQ=Invesco QQQ Trust

BND = Vanguard Total Bond Market Index Fund

Source: Yahoo Finance.

SPY and BND have their worst Jan-May losses since inception (1993 and 2007, respectively). QQQ has its worst year-to-date loss since 2002 (1999 inception). BUT, half of all Jan-May declines, ended higher by their year-end.

What does any of this mean for individual investors? Not much! 

First, lets see the stock market time machine. Exactly how bad IS this decline, expecially in the face of outsized gains of recent years? 

Today's break, as bad as it is, only takes us back one year in the SPY, to the Covid recovery of June 2021; and, in QQQ, to April 2021.  How quickly will we recover to the year-end 2021 highs? No one knows. But all we know is history.

Next, for those who follow Bogle's admonition to "Stay the Course" through market declines, we have to recognize that market breaks are inevitible, and, in the end, market breaks are the price we pay to earn the highest long-term gains of anyone in the market. 

Why the SPY, QQQ and BND? Because anyone can BUY them. You cannot buy an index but these ETFs are constructed and, historically, match the return of the S&P 500, the Nasdaq 100 and the Total Bond Market index-the largest broadest and most popular indexes on the planet.  

Why NOT bitcoin? Two answers: for most people they don't understand it and they don't want it, for others, the complexity of creating and entrusting funds in a bitcoin wallet is a bridge too far, ignoring the fact that bitcoin is just a computer program with no intrinsic value. What about GBTC? The Grayscale Bitcoin Trust has been about the easiest way to own bitcoin, through your trusted broker, since its inception in 2015. But that begs the question WHY? Yes, GBTC has matched bitcoin's speculative gains, it is also matching the current decline.

This is yahoo.com data that anyone can access free. My excel spreadsheet (ETFs 20220602) is available upon request. 

Disclaimer: Posts are for education only, may be subject to change without notice, and, while prepared with care, may be subject to omissions and errors. Send request to gdrahal@outlook.com to follow this blog and for additional information. 

© 2022 George Rahal