Before investing, having an opinion about the direction (having a market bias) of the major stock market indexes is critical. Here’s how stock market indexes can help you make better investment choices and help you preserve wealth.
Stocks usually follow their market index
Most ETFs and mutual funds are created from stocks. All stock market indexes are made up of its member stocks. Most of these stocks will follow the direction of market index itself – it’s really that simple. For example, when the Dow Jones trends up, usually most of its thirty member stocks do too. And when the Dow Jones trends down, generally so do its thirty member stocks.
Stocks market indexes often predict the economic future
Generally, these three major stock indexes also lead the economy by three months. In other words, the economy will follow the direction of the major market indexes three months later. There are exceptions to this, but these exceptions occur for short periods and are rare.
We think that there’s a better way – all markets are inter-related
A popular opinion is to ride it out and stay focused on the long term. However, these “long term views” can sometimes take more than a year and often “swing” between highs and lows wiping out gains, or worse adding to losses. As an example, the SP500 in early 1998 was at the same level as it was in October 2011 – 13 years of zero net gain. Long term investing is likely a thing of the past.
An opinion about Gold will help when buying Gold stocks
We provide candid analysis of these three major stock indexes to identify major tops and major bottoms. We also provide candid analysis of the US Dollar, the Euro, Gold, Silver, WTI Oil, Natural Gas, Real Estate and Interest Rates. We do this in order to provide investors a better chance of understanding when to get into the market, when to get out of the market or sometimes when to sit on the sidelines and wait. A good starting point is a weekly chart.
We feel this approach helps investors make better choices, earn more and preserve wealth.
We analyze and comment on these three major stock indexes
- Dow Jones Industrial Average - About this market index
- Standard and Poor’s 500 - About this market index
- NASDAQ 100 Index - About this market index
We analyze and comment on these commodities
- US Dollar Index - About this market index
- Euro Dollar Index - About this market index
- Spot Gold
- Spot Silver
- WTI Oil - About this market index
- Natural Gas - About this market index
- Real Estate - About this market index
- US Prime Rate
Interested in following us to make better investment choices?
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