Devon Energy Benefits from Long-Term Investing as S&P 500 Resists Shutdowns
Investors who prioritize fundamentals, maintain diversification, and adopt a long-term perspective are better equipped to navigate short-term market fluctuations, as evidenced by the resilience of the S&P 500 following government shutdowns. Devon Energy, a U.S.-focused independent oil and gas producer, stands to benefit from this trend.
Since 1976, there have been 21 government shutdowns in the U.S. Historically, the S&P 500 has shown remarkable resilience, generating stronger-than-average gains in the year following each shutdown. Specifically, the average 12-month price return of the S&P 500 following a shutdown is 13%. Looking further ahead, at three- and five-year intervals, the S&P 500 appreciates by 51% and 80% on average after a shutdown. This resilience is attributed to the markets' ability to withstand short-term disruptions and investors' focus on fundamentals.
Devon Energy (DVN), a U.S.-focused independent oil and gas producer, has a multi-basin portfolio that positions it well to capitalize on this trend. The company's diversified portfolio and focus on fundamentals align it with the investment strategies that have proven successful in navigating short-term market fluctuations.
In conclusion, investors focusing on fundamentals and maintaining a long-term perspective are well-positioned to weather short-term market disruptions, as demonstrated by the S&P 500's performance following government shutdowns. Devon Energy, with its diversified multi-basin portfolio, is poised to benefit from this approach.
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