A Brief History of NASDAQ, Utilizing Undervalued Stocks, & Investor Psychology

A History of NASDAQ Trends & Undervalued Stocks

This week brings with it another action-packed episode of Money Wise and, as always, the guys kick it off with a look at last week’s numbers from Wall Street. The Dow was up 2.0%, the S&P was up 1.8%, and the NASDAQ was up 2.0%. Year-to-Date all markets are on the rise with the Dow up 1.9%, the S&P up 11.5%, and the NASDAQ up 26.5%. The guys also share an interesting new statistic, through the first 100 trading days of 2023, the NASDAQ has been up over 20% YTD – for just the fifth time in its history. The guys take time to discuss the history of the NASDAQ as well as some interesting statistics emerging out of the S&P that they think we can learn from. For the Money Wise guys, what we’re seeing statistically out of the S&P is due to 10 primary stocks that are driving more than 90% of the return YTD. They discuss how AI has helped accelerate the situation with NASDAQ and the performance we’re seeing with the S&P and what this all means for the home investor. The guys delve into this area of stocks that are fundamentally solid but getting no love in the markets because of AI’s influence and how the individual investor may be able to capitalize on these undervalued stocks.

Using the History of NASDAQ to Make Sense of Current Trends

The thing about investing is that, although the markets are unpredictable, there’s plenty we can learn from the past to help give us a better sense of how they are performing currently, and how they may perform in the future. That’s why the Money Wise guys spend so much time this episode exploring the history of NASDAQ and all the times we’ve seen trends occur that are similar to what we’re witnessing now. NASDAQ is an acronym that stands for “National Association of Securities Dealers Automated Quotations,” however, it is also commonly used to reference the Nasdaq Composite which is an index of over 3,700 stocks listed on the NASDAQ exchange. Some of the stocks you may be most familiar with are Apple Inc., Microsoft, Google, and Amazon.com. Since the creation of NASDAQ in 1971, there have only been four other years where the NASDAQ index was up 20% or more in its first 100 days – 1975, 1983, 1986, and 1991. What stands out to the guys when looking at this statistic is that, for three out of those four years, the NASDAQ ended up being lower by the end of the year than it was at the 100th trading day. Therefore, if we are to learn anything from these statistics, it’s that we may want to remain cautious in believing that the NASDAQ will close out the fourth quarter as strongly as it has closed out the first.

In the second hour, the Money Wise guys discuss Investor Psychology. You don’t want to miss the details! Tune in for the full discussion on your favorite podcast provider or at davidsoncap.com, where you can also learn more about the Money Wise guys or take advantage of a portfolio review and analysis with Davidson Capital Management.