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02-04-2013, 08:54 PM
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#1
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Recycles dryer sheets
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S&P
Why is it more important than the DOW? And what do we want the S&P to get to, and why? 
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02-04-2013, 08:55 PM
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#2
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I think it is more important because it is a broader measure of the large cap stock market (500 large cap stocks vs 30 large cap stocks).
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02-04-2013, 09:58 PM
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#3
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Full time employment: Posting here.
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 Quote:
Originally Posted by pb4uski
I think it is more important because it is a broader measure of the large cap stock market (500 large cap stocks vs 30 large cap stocks).
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+1. It amazes me that the DOW usually gets so much more attention in the media.
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02-05-2013, 06:05 AM
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#4
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Thinks s/he gets paid by the post
Join Date: Dec 2012
Location: Georgia
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Even the S&P 500 isn't really the index I think we should be watching closely. I think we should look even broader, to an index like the MSCI USA Broad Market Index.
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02-05-2013, 07:49 AM
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#5
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Recycles dryer sheets
Join Date: Dec 2010
Posts: 445
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Thank you all--BUU I'd never heard of that one, and will follow it as well.
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02-05-2013, 07:52 AM
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#6
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I am unsure that "watching" a particular Index serves any real useful purpose. I am reminded by the statement (I forget the author) that goes something like, "What if when you came home from work each evening and there was one of those electronic signs above your front door showing the current market value of your house (based on recent sales in your neighborhood), would you sleep better?"
Indexes do, of course, have a purpose which is to get an Alpha reading on a specific MF/ETF (or Stock bundle) against a select/specific Index.
I, also, don't understand the purpose in the Media showing the figures in Points instead of percentages -- which is more useful a 73 point decrease or -0.53%. I suppose 73 sounds better (scarier) than 5 basis points. (Although, I don't spend much time worrying over this.)
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"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
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02-05-2013, 08:02 AM
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#7
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You mean 53 basis points, right?
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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02-05-2013, 08:05 AM
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#8
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Quote:
Originally Posted by pb4uski
You mean 53 basis points, right?
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Yes. Another case of I should have quit when I was ahead. Or more coffee is needed. 
__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
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02-06-2013, 08:17 AM
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#9
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In general, the business news outlets focus on DJIA, S&P500, and NASDAQ because they are widely-known/held, broad indices (though the DJIA is not so broad, but it does include the bellwether companies). They focus on the second-to-second movement of these indices, and other individual investments and funds, because that's what they do all day...
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02-06-2013, 08:34 AM
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#10
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Doesn't seem that important to me, so I guess I'm a cretin. Most (not all) days the DJIA, NASDAQ & S&P go up or down together and often a similar %, so I don't worry much about which one to watch. YMMV
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02-06-2013, 08:40 AM
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#11
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There isn't a fixed target for the S&P 500, as it is expected to rise over time, even though it may act as a roller coaster most of the time.
Why Because company earning increase over time, and the S&P is an index of the largest 500 public companies (more or less), and their stock prices tend to follow their earnings, even though the price-to-earnings ratio may expand and contract over time as well.
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02-06-2013, 09:37 AM
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#12
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Moderator
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02-06-2013, 09:47 AM
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#13
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Thinks s/he gets paid by the post
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Quote:
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Originally Posted by RonBoyd
also, don't understand the purpose in the Media showing the figures in Points instead of percentages -- which is more useful a 73 point decrease or -0.53%. I suppose 73 sounds better (scarier) than 5 basis points. (Although, I don't spend much time worrying over this.)
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This has also been a pet peeve of mine.
Unless someone really follows the market closely, these numbers are meaningless. The media would serve the public better if they just said that the market is up a little / some / OMG!!!
That said, reporting percentages would be be more useful than points.
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02-06-2013, 09:47 AM
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#14
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LOL! I, for sure, am glad I don't have migraines.
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"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
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02-06-2013, 10:25 AM
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#15
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Quote:
Originally Posted by RonBoyd
I, also, don't understand the purpose in the Media showing the figures in Points instead of percentages -- which is more useful a 73 point decrease or -0.53%. I suppose 73 sounds better (scarier) than 5 basis points. (Although, I don't spend much time worrying over this.)
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Most if not all show both points & % with a green or red arrow that I've seen, CNN, CNBC, NBC, CBS & ABC...same with online sites.
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No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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02-06-2013, 10:34 AM
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#16
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I recall seeing the arrows but not the %. Tells you how much I was paying attention. (See the "some/a little/OMG!" comment.) I will look again when I get a chance.
__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
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02-06-2013, 11:10 AM
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#17
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Give me a museum and I'll fill it. (Picasso)
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Quote:
Originally Posted by RonBoyd
Indexes do, of course, have a purpose which is to get an Alpha reading on a specific MF/ETF (or Stock bundle) against a select/specific Index.)
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R-Squared - Video - Investopedia
__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
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02-06-2013, 05:56 PM
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#18
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Recycles dryer sheets
Join Date: Dec 2010
Posts: 445
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[QUOTE=RonBoyd;1280137]I am unsure that "watching" a particular Index serves any real useful purpose. I am reminded by the statement (I forget the author) that goes something like, "What if when you came home from work each evening and there was one of those electronic signs above your front door showing the current market value of your house (based on recent sales in your neighborhood), would you sleep better?"
Wouldn't sleep better, no, but I do check the Zillow page for our properties a couple of times a week: satisfies my curiosity. And I check the stock market indices to see whether they are going up or down as a quick and dirty indication if up is a general trajectory or whether all H*ll is about to break loose economically.
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02-06-2013, 06:16 PM
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#19
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Give me a museum and I'll fill it. (Picasso)
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Quote:
Originally Posted by palomalou
Wouldn't sleep better, no, but I do check the Zillow page for our properties a couple of times a week: satisfies my curiosity. And I check the stock market indices to see whether they are going up or down as a quick and dirty indication if up is a general trajectory or whether all H*ll is about to break loose economically.
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And if it was? Wait... a better question, what if it isn't?
(I can imagine some trying to answer the applicable question on a daily -- hourly? -- basis. How exciting their lives must be)
__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
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02-06-2013, 08:50 PM
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#20
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Recycles dryer sheets
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Why, if all h*ll were about to break loose, I'd hide under the bed, of course!
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