Election Year Market Concerns – let’s look at the numbers

The bottom line is this: Markets are usually up in election years and the year after election years – the first year in the new President’s term. Ok, you have the punch line! This is not surprising – going back 89 years – the USA total market (small stocks to large) is up three out of every four years. So no matter what angle you look at the market – it’s going to up most of the time – about 75% of the time. At this link see a google slides presentation (similar to power point)  – you can page through it in a two minutes. Looks at it from several different angles and should satisfy your...

A Better Way to Report Market Status

One of the fundamental flaws in our culture’s approach to stock market monitoring can be found in how the “Financial Media” refers to “The Market”. “The Market” did this or “The Market” did that! The market is overvalued; the market is undervalued! What’s “The Market”?  Ah ha!  A very good question!! The most often quoted index is the Dow Jones Industrials – just 30 stocks. A tiny slice of the market – only large USA companies and only a portion of them! It’s amazing to me that we put up with this very poor coverage of the global markets. The S&P500 and NASDAQ are often reported.  Neither of these tell us what’s happening with small company stocks, developed countries outside of USA or emerging markets. How many times (I should keep a count!) has the the market been categorized as flat or down – when the US Small companies were up 1% that day as measured by the Russell 2000?  Did you know the asset class of Emerging Markets is up 17% this year? Of course not – the financial media apparently doesn’t believe in asset classes – yet that is how markets behave. Statistical studies have shown that 96% of stocks’ price movement can be attributed to their asset class. What would I do differently if I were in the financial media – to have an impact on increasing the knowledge base of US investors? I would start with instilling three indices in our culture: S&P500: 500 large US stocks – a major portion of the US large company stocks – represents behavior of large US stocks. Russell 2000: 2,000 small US stocks –...