Bull Market Has Broadened

Published Friday, December 11, 2020 at: 7:51 PM EST

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Facebook, Apple, Amazon, Netflix, Google, and Microsoft -- the FAANGM stocks -- were the runaway leaders of the new bull market that began after the Standard & Poor’s 500 bottomed on March 23, but now the rally has broadened. It’s good news.

The S&P 500 is a capitalization-weighted index, which makes the companies with the largest market capitalization more influential in the value of the index of the 500 companies. Over the 12 months ended Dec. 7, the widely-quoted S&P 500 index significantly beat the index of the 500 companies equally-weighted. Recently, that changed. The equal weighted index of the S&P 500 has trounced the market-cap weighted index since the election.

The S&P 500 is not just a measure of stock prices; it’s a measure of the strength of the nation. With the other 494 companies in the S&P 500 catching up to the FAANGM, this shows investors are confident that the broad economy will follow the leadership of the FAANGM.   

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The Standard & Poor’s 500 stock index closed Friday at 3,663.46. The index declined a fractional -0.13% from Thursday, -0.96% from a week ago, and has gained an astounding +48.33% from its March 23rd bear market low. The broadening of the bull market is a step toward normalcy following the year of the pandemic.


Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. It does not take into account your investment objectives, financial or tax situation, or particular needs. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. The material represents an assessment of financial, economic and tax law at a specific point in time and is not a guarantee of future results.

This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial advice without consulting a professional about your personal situation.

Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. Past performance is not an indicator of your future results.

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