Mutual Funds At Risk With The Stock Market Reaching New Highs

  NEWPORT NEWS, VA - 02/23/2017 (PRESS RELEASE JET)

Lee Smith, owner of RetireSafer.net introduces a new defensive strategy to protect against a stock market crash.

The three major stock market indexes all hit new highs just recently in 2017. The Dow Jones industrial average at 20,738.93, the S&P 500 reached 2,365.17, and the Nasdaq at 5,865.95.  

Lee Smith advocates following the short term trend which is the 12 month moving average price and following the long term trend which is the 24 month moving average price of the S&P 500 Index. The S&P 500 Index consist of 500 of the biggest companies in the world and is considered the benchmark for the overall stock market. 

In 2001 and 2008, the price of the S&P 500 Index fell below its short term and long term trend which led to a decrease of over 40% for mutual funds in general. There was an increase in money market funds from regular mutual funds when the economy was in a recession in 2001 and 2008. Following the short term and long term has been a consistent key indicator for the last two major stock market crashes.

By keeping up with the stock market trends, investors of mutual funds can gauge the performance of mutual funds. Since stocks are in mutual funds, this means mutual funds will always follow the direction of the stock market indexes. To learn more about the current stock market direction and its trends visit http://RetireSafer.net.