| The S&P 500 Index is a list of the 500 | | | | how the strategy works. The answer is right in |
| largest companies in the world such as Target, | | | | the chart because this is physical evidence of |
| AT&T, Apple, BP, Coke and many more. By | | | | what is presently going on every day. These are |
| watching the S&P 500 Index you can see | | | | real companies with their stock prices going up |
| what and how the overall market is doing. Other | | | | and down. When most or all stock prices are |
| indexes are the Dow Jones Index but it only has | | | | starting to decline, it is the sign that investors are |
| 30 companies and the Nasdaq Index which has | | | | selling. The reason they are selling is because |
| many small companies. These two Indexes follow | | | | these companies are about to be earning less |
| the direction of the S&P 500 Index because | | | | money than before. Stock prices go up when |
| of its more well known companies. | | | | companies increase theirs earnings and they down |
| To see how the this works is go to any website | | | | when their earnings are decreasing. You can see |
| financial page and click on the name of this index. | | | | this yourself by looking at the S&P 500 |
| Next is to set the time frame for months. When | | | | Index chart. |
| you are viewing the market over the last 12 | | | | This all points to our economy. Our economy is |
| months with the month to month price rather | | | | base on the gross domestic product. This is the |
| than the day to day price you will find all the zig | | | | increasing and decreasing of services and |
| zags are eliminated. | | | | products that are produced by business services |
| The zig zaging of price movements is where | | | | in the U.S.A. The Government have Economists |
| investors become confused because all they see | | | | study how the U.S. economy is doing every |
| is the changing in price. This is caused from the | | | | month. These reports show how the |
| buying and selling of stocks from thousands of | | | | manufacturing of products, employment, business |
| investors. Setting the time frame of the stock | | | | services and retail goods are performing currently |
| market chart to be viewed from month to | | | | and in the past. It easy to see if the U.S.A. |
| month instead of day to day makes all these lines | | | | economy is in a recession by comparing it to the |
| you see in a chart become straight. When doing | | | | stock market. |
| this you will see the straight lines over many | | | | Investing points are: |
| months as well as years. The stock market | | | | A. The same companies in a IRA and 401k plan |
| becomes a picture on pause because you are | | | | are in the S&P 500 Index which is the stock |
| able to see when the market was going down | | | | market. |
| and up. | | | | B. It is viewed as of the most watched Index |
| To know when the market is declining and losing | | | | because of all the well established companies. |
| money is to look at the 1 year low. The 1 year | | | | C. Mutual Funds are a portfolio of stocks from |
| low means the stock market price is below the | | | | hundreds of companies. |
| same price it was 12 months ago. It also means | | | | D. View the chart of the S&P 500 index |
| no money was made in your retirement fund. | | | | using the month to month price and not the day |
| When the stock market is above its 1 year low in | | | | to day price. |
| the past 12 months you can rest assure that the | | | | E. It has to be above its 1 year low because this |
| stock market has stopped declining. | | | | means the stock market is no longer dropping. |
| To see if the market is leveling out and not going | | | | F. It has to be above its 1 year average for the |
| down is to look at its 1 year average. The 1 year | | | | stock market to be rising up. The 1 year average |
| average is the average price over the last 12 | | | | is the average price over the last 12 months. |
| months. As long as the stock market is above its | | | | To learn more about stock market cycles and |
| 1 year average this means the stock market is | | | | trends is to visit the website that shows you how |
| rising and you are making money in your IRA and | | | | to become a better investor. The best |
| 401K. | | | | investment strategy for mutual funds is being able |
| A lot of articles will write about a mutual fund | | | | to transfer from declining mutual funds in to safe |
| investment strategy but none will tell you why or | | | | funds. |