Next week, Friday December 29th 2023 at 4 PM the NYSE will close and every listed security will be marked at it's closing price for the year! Maybe 3:59 PM, or close to it, will be THE BEST TIME OF THE YEAR to buy your selected stock index exchange traded fund (ETF) or better yet, if your broker allows it, a TAS order (Trade at Settlement).
We don't know the future but we do know the past. So here are the normalized continuously compounded returns for the largest, most liquid index ETFs for the past 20 years (12/31/2003 = 1000):
The SPY averaged 7% per annum for the last 20 years. The QQQs, 12%, and IWM 5%. Of course, you can take your chances picking stocks or you can just stay long the index. The S&P beats over 70% of all active managers! The Nasdaq? Even more!
Why buy on the closing price of the year? For better or for worse, Wall Street is measured by annual calendar returns and this aligns YOUR investments with Wall Street. And, why ETFs? You can BUY ETFs! You can't buy indexes. But you don't need to, these major index ETFs have almost no tracking error, that is, they are virtually equivalent to buying the index itself with almost no costs of ownership.
Happy Holidays and Good Luck in 2024!
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