How is the Market Doing? Despite all the noise being trumpeted by the media, the daily prattle about market moves is often wide of the mark and overloaded with information that is misleading or just plain inaccurate. How else to explain a jump of several hundred points one day followed by a plunge the next day? That makes no sense. Over time, the foundation for stock valuations is underlying profitability of the companies involved. As profits increase, stock prices rise, though not necessarily in perfect reflection. The relationship tends to be meaningful over extended periods, but often not in shorter spans of time. That’s all about changes in investor psychology. So let’s begin by defining the “market”. If we are referring to stocks, the most common reference is to the Dow Jones Industrial Average, which consists of 30 major companies whose progress might be considered representative of the U.S. economy as a whole. The majority of the companies included here are r
Up, Down & Sideways In past years, the warmer months brought with them a time to turn one’s thoughts to more blissful endeavors. Although childhood may have been many years ago, what lingers is the apparent freedom from care we felt when at last we were done with school. Much has changed since those halcyon days when time hardly seemed to move. Back then, the days went by slowly and the important decisions were few. Now it’s almost as if you don’t know which direction to turn first. It’s all about communications and the seeming necessity of keeping up to date with what’s going on. Much of the rising flow of developments may have little impact, but even so it’s no longer a time when we can disconnect until September. From an investment perspective, the challenge is to sort through the rapidly growing mountain of information to isolate the data that is critical and take action where it is needed. On a grand scale, it’s a matter of separating the wheat from the cha