Blue Chips Rebounded In October
By Thomas K. Meakin
October was a disappointing month for investors in insurance stocks as we saw our specialty substantially underperform the general market.
The 116 stocks priced came very close to breaking even. As a portfolio they were down only a minimal 0.21%. But that was a far cry from the 10.60% gain in the DJIA, and an even better 13.45% surge in the NASDAQ Composite. The S&P 500 joined the general market advance with an 8.64% gain.
I think it is useful to look back at a very tough summer for insurance stocks. The issues we priced monthly were down 8.96% in July, 4.19% in August, and 6.52% in September, which brings us into October after an almost 20% average summer markdown in our specialty!
Breaking even in October is at least an indication that insurance stocks may have stabilized, or better, have bottomed out after a three-month bear market of their own. Suffice it to say, insurance stocks appear better positioned to do well in the market after taking their shareholders for exciting rides down the River Styx in July, August and September!