A not so random observation…This weekend I was looking at how the S&P 500 has behaved year-over-year based on where the index start at the first trading day of the year. Since 2002, the S&P 500 has always spent part of the year in the red. By this I mean that the price of the index fell at some time during each year below its adjusted close on the first trading day of the year.
The anomaly to the trend noted above is our current year, 2012. So far the index has yet to break into negative territory. It came close during the May-June sell off, but failed to close below where it began on the first trading day of the year. We still have over a month left in the year…I suppose anything can happen.
Master Limited Partnerships (MLP) have sold off heavily since the post-election market decline. The market fears that their favored tax status will be adjusted. Either the high yields that these stocks currently carry will be depressed or investors in such companies will be hit with higher tax rates. That’s the fear. What will the reality be? Who knows. Friday saw a significant amount of buying activity in many MLPs.