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HomeStocksThe stock market in 2020, a year of irrational exuberance

The stock market in 2020, a year of irrational exuberance

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“U.S. stocks spent the final session of the most tumultuous year in recent memory doing something that became routine in 2020: setting records.

The Dow Jones Industrial Average rose 196.92 points, or 0.7%, to 30606.48, recording its 14th record close of 2020 after a relatively muted session ahead of the year-end holiday.

The S&P 500 recorded its 33rd record of the year, rising 24.03 points, or 0.6%, to 3756.07. The Nasdaq Composite added 18.28 points, or 0.1%, to 12888.28—missing its 56th record close by about 10 points.

In the end, the three major indexes notched more than 100 record closes in 2020, and finished a chaotic year in winning fashion. The Dow rose 7.2% for 2020. The S&P 500 jumped 16%, the Russell 2000 index of smaller-cap stocks gained 18%, and the Nasdaq surged 44%.

Adding those gains to 2019 gave the S&P and Nasdaq their best two-year runs since 1998 and 1999, the height of the dot-com boom. For the Dow industrials, it has been the best two-year run since 2017.”

Stock market data: The Wall Street Journal

Stock market crash and stock market rally

What a year was 2020 for the stock market. After the stock market crash in March 2020, there was a stock market rally for the rest of 2020. And now stocks seem to be expensive, especially the tech stocks. Stock investing, stock trading in 2021 will need to be adjusted to basic stock market rules. Valuation, prospects, due diligence. Stocks to buy or stocks to sell need a lot of fundamental analysis first, not just technical analysis.

How to invest in stocks

Avoid emotions. Stocks to buy should have arguments in favor of. Stocks to sell same too.

Happy new year 2021 from the stock market on the internet.

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1 COMMENT

  1. […] The last trading week of 2020 saw major indexes hitting all-time highs, with small-cap stocks underperforming. A year with solid gains, especially for tech stocks. Will there be a Santa rally for 2021? It is too early for that, but what we should expect is a rotation of stock investing as the US stock market closed 2020 on record highs and stocks have become expensive. Although trading was light all major indices, except for Russell 2000 closed higher for the week. For 2021 I would expect value investing to gain more momentum, as growth stocks may face profit-taking. Both health care and consumer discretionary stocks were strong, while energy stocks lagged. […]

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