Heavy selling, as of late, is what the headlines are focused on. But let’s take a closer look at two major indexes.
- 52% of the stocks in the Nasdaq Composite Index are down by 20% or more in the past year!
- 44% of the Russell 2000 Index are experiencing the same thing.
As companies eliminate their shares, each share that is left in the market becomes more valuable; causing a real increase in value and price. Many of the S&P 500 stocks are actually borrowing to buy back their own shares – a strategy that to date has worked. But let’s face it, this isn’t real growth.
The economy continues to show serious weakness:
- Stagnant wages
- High under-employment
- Increased consumer debt levels