Special to the Town Crier
Stock Report
The year 1998 was some year for investors. Stocks zoomed up 23 percent in the first 6 1/2 months, and then plunged nearly 20 percent during the summer only to rebound.
This past year is virtually certain to end as an unprecedented fourth year in a row where overall gains in the stock market were more than 20 percent.
The Town Crier Stock Index, with four trading days remaining before the end of the year, is up almost 30 percent. During the last month, technology issues and small cap stocks in the index increased more than 25 percent.
Many investors are sitting on top of immense profits earned over the past four years, but they also hold some of the riskiest portfolios of their lives as stock gains have far outrun corporate technology earnings.
As of Monday morning, the Dow Jones industrial returned 17 percent for the year, the Nasdaq 38 percent, and the Town Crier technology stocks 29.9 percent.
What investors have learned from following stocks this year:
Stocks are priced for the long term. What happens today or tomorrow matters far less than the soundness of a company or its ability to deliver profits in the future.
Events that we think are disastrous are often ignored by markets, partly because they already have been priced into stocks.
A good example is the plight of Japan over the last three years and how it has affected the U.S. markets. Another is the Clinton affair.
There will be one more week to report Town Crier index stocks. Starting with the Jan. 13 issue, the Town Crier Index will include Internet stocks.
Internet stocks with executives living in Los Altos and Los Altos Hills will be included and tracked for the entire year, starting with the Jan. 1 price. Companies such as Infoseek and Yahoo will be included.