2009 Year-End Screening Review: The Bulls Stage a Rally
by Wayne A. Thorp, CFA
What a difference a year can make. After the S&P 500 posted its third-worst decline in 2008—losing 38.5%—few investors expected the stock market to stage such a remarkable comeback in 2009. Year-to-date, the S&P 500 is up 21.3% (through the end of November). While there is no doubt many are letting out a sigh of relief, it is sobering to realize that, despite this year’s impressive gains, we are still approximately 40% off the market highs of October 2007. Adding to the trepidation is the potential for a “double-dip” recession.
Looking at the 60 stock screens AAII tracks at AAII.com we see that, in general, they too have enjoyed a rebound. Through the end of November, only five of the 60 were down for the year, while the typical screen was up 40% for the year. This makes 2009 the second-best year for our stock screens, trailing only the 55.3% median gain in 2003. Eleven of the screens are experiencing their best years ever.
In this article
- Ranking 2009 Performance
- The Top Performer for 2009
- A Word About Dividends
- Long-Term Winner
- Risk-Adjusted Returns
- Conclusion
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Ranking 2009 Performance
Table 1 summarizes the performance and volatility of the stock screens that are tracked at AAII.com and built into AAII’s fundamental stock screening and research database program, Stock Investor Pro.
Table 1 presents the price change performance for the various screening methodologies, which are broken down into style groups: value, growth & value, and growth. In addition, specialty and sector approaches are broken out separately. The screening strategies are ranked in descending order within their grouping by their year-to-date price performance as of November 30, 2009. The bottom of the table presents performance data for major stock indexes.
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