The Word from Main Street

Market Update for the Week of April 27th, 2026

From its low on March 30th to the high it reached on April 17th, the S&P 500 (SPX) gained more than 13% and is now up a little over 4% for the year (through 4/22). Meanwhile, the Nasdaq-100 (NDX) has had an even sharper rally as it has risen more than 17% from its low. Given its speed, investors who didn’t get in before the rally started may have found it difficult to find an entry point as there were few, if any, pullbacks from the time the market bottomed to when it hit a new all-time high. And, if they have money to put to work, these people may now be reticent to buy into a market trading at all-time highs.

In this situation, it can be tempting to simply layer in exposure – it provides flexibility to buy lower if the market exhales. But while it may seem like an attractive option, unfortunately we usually pay for that flexibility in the form of lower returns. To illustrate the effects of layering or averaging in versus putting all your money to work now, Nasdaq Dorsey Wright (NDW) looked at two hypothetical scenarios for 10-year holding periods. They calculated the returns for both scenarios every month from January 1985 through April 2016, the last month for which they could calculate a 10-year forward return.

The “All In” Strategy ~ This scenario assumes you invested all available funds in the SPX at the beginning of the period. So, for example, in January 1985 all available funds would be invested in SPX for the next 10 years. NDW then calculated the returns for a hypothetical start date of February 1985, March 1985, and so on, through April 2016.

The “Average In” Strategy – This scenario assumes you invested an equal amount of the portfolio in the SPX each month over the entire 10-year period. As with the “All In” strategy, NDW calculated the returns for the “Average In” strategy for hypothetical start dates at the beginning of every month from January 1985 through April 2016.

Source: Nasdaq Dorsey Wright

The test shows that, historically, going “All In” has clearly been superior to the “Average In” strategy. This may not be terribly surprising, after all, the market generally goes up over time, and with the “All In” strategy, you have the power of compounding on your side. What may be surprising, however, is the magnitude of the difference.

On average, the “All In” strategy outperformed the “Average In” strategy by more than 75% on a cumulative basis. There was also a dramatic difference in the best performance for each strategy - going “All In” in October 1990 generated a maximum 10-year return of over 370%, meanwhile the best return for the “Average In” strategy was a relatively paltry 145%. Not only did the “All In” strategy generate higher average, median, and maximum returns, but it also produced positive returns more consistently, albeit by a slim margin. The “All In” strategy produced positive returns just over 92% of the time.

There were 376 months in the test period, giving NDW 376 observations or hypothetical portfolios. Of these, only 28 produced a negative 10-year return. Interestingly, all 28 came in consecutive months from October 1998 through January 2001, near the height of the dot com bubble. The “All In” strategy also outperformed the “Average In” strategy with notable consistency – out of the 376 observations, “All In” outperformed “Average In” 345 times. Out of the 376 starting points NDW looked and all the different market conditions that existed then, you would have been better off going “all in” more than 90% of the time.

Missing “the dip” is undoubtedly frustrating and putting money into a market trading at all-time highs can be uncomfortable. But, historically, you’ve been better to go ahead and put your money to work rather than trying to hedge your bets by layering in exposure.

Source: Nasdaq Dorsey Wright

The current reading for the PR4050 is: Money Market = 2.11% & U.S. Equity Core = 97.18%. For the PR4050 indicator to trigger and alert us when we should consider moving to cash, Money Market must be 50% or above and U.S. Equity Core must be 40% or below.

Source: Nasdaq Dorsey Wright

Below is the most recent D.A.L.I. (Dynamic Asset Level Investing) Indicator showing International Equities and Domestic Equities in the top two spots, while both maintain a commanding lead over Cash and Fixed Income.

Source: Nasdaq Dorsey Wright

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Main Street Wealth Advisors
33801 1st Way South, Suite 271
Federal Way, WA 98003
Office: (253) 944-1047
Fax: (253) 944-1075
www.mainstreetwa.com

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Securities and advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC.

These views are those of the author, not of the broker-dealer or its affiliates. This material contains an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. All investments involve risk, including loss of principal. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. All indices are unmanaged and may not be invested into directly.

Technical analysis is based on the study of historical price movements and past trend patterns. There is no assurance that these movements or trends can or will be duplicated in the future. Nasdaq Dorsey Wright developed the indicators described above. They have been prepared without regard to any particular investor's investment objectives, financial situation, and needs. Accordingly, investors should not act on any recommendation (express or implied) or information in this report without obtaining specific advice from their financial advisors and should not rely on information herein as the primary basis for their investment decisions.

Nasdaq Dorsey Wright’s “DALI" employs relative strength-based analysis to rank macro asset classes based on developing leadership trends within the global capital markets. The objective guidance within DALI provides the tools necessary to properly allocate portfolios across all major asset classes in an effort to emphasize strength wherever it exists. Domestic Equities, International Equities, Commodities, Currencies, Fixed Income and Cash are evaluated daily to identify dynamic developments across investment genres, as well as within them. This tool provides the tactical precision that allows investors to adapt as the market leadership changes.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.

The S&P 500® Index: A free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the S&P 500® are those of large publicly held companies that trade on either of the two largest American stock market exchanges: the New York Stock Exchange and the NASDAQ.

MSCI World Index: A broad global equity index that represents large and mid-cap equity performance across 23 developed markets countries.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.