Brandy Auterson-Hurst:
4 Your Money is brought to you by NelsonCorp Wealth Management. It’s now time for 4 Your Money. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. Welcome back, David.
David Nelson:
Thank you very much, Brandy.
Brandy Auterson-Hurst:
So investors often focus on the major indexes like the S&P 500, but what can we learn if we dig a little deeper into the market?
David Nelson:
It can be misleading, and I think that’s what you’re getting at there as far as at the index level. Oftentimes we’re seeing either big moves up, big moves down. But underneath, yes, there could be a whole different story as far as looking at the individual stocks and how they’re reacting. This has been amplified in recent times with the sheer size of some of these technology companies as far as out there. So the chart I have today, what we’re trying to illustrate here is something looking at market breadth, which is basically a way of measuring as far as new highs versus new lows and trying to make some sense out of that and what does it really mean? When this happens, it basically tells us the market is becoming much more divided when you’re having the extremes like we’re seeing right now. If you look at where the yellow line is pointing, we’re hitting some highs here.
And these highs are basically saying, in a simplistic way is that the market is out of gear, which again is basically saying we’ve got a lot of ups and we’ve got a lot of downs as far as stocks hitting 52 week lows. So something certainly we want to keep an eye on as far as looking forward.
Brandy Auterson-Hurst:
Okay. So what should investors take away from that?
David Nelson:
Well, while the market may feel a bit uncertain and kind of scary as far as this point in time, I think the big thing is to emphasize that it’s not falling apart. And I can only say today, but going forward, I think the leadership could be changed and that may be causing what’s taken place.
Brandy Auterson-Hurst:
All right, David, as always, thanks for joining us today.
David Nelson:
Thank you.
Past performance is no guarantee of future results. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal.
Indices mentioned are unmanaged and cannot be invested into directly.
This video includes a paid appearance.