The S&P 500 has seen a historic turnaround in 2020. Despite the coronavirus pandemic causing a significant decline in stock prices, the market has continued to reach near record heights as investors began to look past the pandemic and to the immense opportunities over the next few years. With the increasingly positive outlook, there are three charts you need to watch to make sure you stay ahead of the game.
The first chart to watch is the S&P 500 itself. As the stock market’s most important indicator, the S&P 500 tracks the performance of the 500 largest public companies in the US. Keeping an eye on this index is essential for assessing the overall health of the stock market. Over the last year, the S&P 500 has seen immense gains. From a low point of 2,191 in March 2020 to an all-time high of 3903 in November 2020, the market has recovered to pre-pandemic levels. This is a great sign that investors are confident in the future of the stock market and should give investors the confidence to invest.
Next, it’s important to watch the Nasdaq Composite index. This index tracks the performance of the top 30 technology companies in the US and is often used to assess the performance of tech stocks. The Nasdaq Composite has seen impressive growth over the last year, climbing from a low of 8,125 in March 2020 to a high of 12,940 in November 2020. This is a testament to the immense faith investors have placed in the technology sector and highlights the immense opportunities that are available in this space. Keep an eye on the Nasdaq Composite to make sure you’re properly positioned to capitalize on these opportunities.
Finally, be sure to watch the Dow Jones Industrial Average. This index is a widely used measure of the stock market, tracking a weighted average of the 30 largest publically traded stocks. Just like the S&P 500 and Nasdaq Composite, the Dow Jones has seen impressive gains over the last year. Since its low of 18,213 in March 2020, it has quickly recovered to its pre-pandemic levels to reach a high of 30,814 in November 2020. This is a great sign of investor confidence in the stock market and is a great sign of the potential growth opportunities. As such, it is important to watch the Dow Jones and use it to assess the stock market’s overall health.
The S&P 500’s turnaround in 2020 has been nothing short of remarkable. While it will be important to remain conservative in the coming months, these three charts are a great way to stay ahead of the game and make sure you capitalize on all the opportunities the stock market has to offer.