We looked at what happened with platform company stock in 2018 and found that on a whole, our platform index outperformed the market even in a bad year. The platform index consisted of the 50 largest platform company stocks weighted evenly. Together, the stocks averaged a loss of 1.38%, which compared favorably to the NYSE composite -11.77% downturn. It also outperformed the Dow, NASDAQ, and S&P 500.
We were curious about how our platform index would compare to the market during and after a dip. Looking at historical data, we found a pronounced slowdown in the second quarter of 2015, a dip in the third quarter, and a recovery in the fourth. Of our 50 platform stocks, only 38 had full data for 2015.
In the second quarter of 2015, the market as a whole slowed down to a -0.30% growth. The platform index, like other indexes, maintained positive growth. The platform index came in second with 2.43% growth, just after the NASDAQ’s 2.72% growth. During the third quarter dip, all the indexes fell within -9% to -10%, except the S&P 500 which fell only -7.39%.
However, in the fourth quarter as all indexes recovered, the platform index skyrocketed by a 12.14% growth. NASDAQ claimed the second greatest recovery with a 7.54% price growth, well behind our platform index.
Raw data from Yahoo! Finance. Analysis by Applico.
Of course, this is only one market dip’s worth of data. We would need to conduct larger analysis to see if the pattern holds across historical data and over dips or even prolonged recessions. As we move into 2019, we’re already noticing trends that confirm this pattern will hold true after the fourth quarter 2018 plunge.