Monday, March 10, 2014
We're In a Stock Pickers Market Now
Here's something interesting: stocks are no longer moving in tandem with the broad market.
From the Wall Street Journal: "The 65-day average correlation of stocks fell to 0.52 in January. While the correlation briefly fell lower in 2011—to an average 0.51 in February—the measure rose to 0.84 later that year. A correlation of 1 would mean that all stocks traded exactly in lock step. From 2009 through the end of 2013, the correlation was an average 0.63."
My view: It's a sign of a maturing market; stock-pickers should do well. Index-buyers, not so much.
In fact, the current bull market is the strongest expansion since 1960