Announcer:
4 Your Money is brought to you by NelsonCorp Wealth Management.
Brandy Auterson-Hurst:
It’s now time for 4 Your Money. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. Welcome back, David.
David Nelson:
Pleasure to be here.
Brandy Auterson-Hurst:
So, David, is there anything you are watching in financial markets as we close out 2024?
David Nelson:
Yes. I think most people probably are well aware that the stock market has done real well. Today, I wanted to focus on something that maybe people don’t think about, and that’s beneath the surface, essentially, what we’re looking at is, we’ve got some stocks that are up and some that are down. And that’s a really important variable as far as looking at market strength, and we call that market breadth. And so, you have advancers and you have decliners. And the number of decliners this year, or in recent times, I should say, has outperformed the advancers. That’s not generally something that we want to see.
So the chart that I brought along today, it’s a really nice visual, and the bottom is, I guess, where I want people to primarily focus. And that is the red lines. And what you see in the far right is something we haven’t seen since ’01, 2001. And that is that we’ve had an extended period of time, day after day after day, amounting to the decliners exceeding the advancers. And so, again, not a real healthy type thing that we want to see for extended periods of time. And this is in a period when the markets are hitting all-time highs. Very rare.
Brandy Auterson-Hurst:
Okay. So what does this mean for investors?
David Nelson:
Fewer and fewer stocks are basically holding the markets up. The S&P 500 primarily, I guess, we’re focusing on today. And as long as those large caps continue to outperform, we’re okay. But as I think many people probably are well aware out there, things can change rapidly. This is not something that we want to see continue. We want to see a broader market. But as it stands right now, we got to keep a very close eye on the advancers versus decliners.
Brandy Auterson-Hurst:
All right, David, thanks for your insight today.
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This video includes a paid appearance.