Barometer Stock

  

Categories: Index Funds, Metrics

See bellwether stock.

It's any security which is thought to be the general standard, or gauge of industry performance. Sometimes this is because a particular stock thoroughly exemplifies industry trends, and other times (more commonly) it is because that particular security is large and relevant enough to have a deciding impact on the direction of its industry or sector.

As goes the barometer stock, so goes the sector.

Generally. JP Morgan Chase and Intel are thought of as barometer stocks for the finance and tech sectors, respectively. They survive in good weather or bad...but they get wet when it rains.

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finance a la shmoop. what is the S&P 500? well the S&P 500 is just an index- that

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is the standard and poors company assembled 500 stocks put them on a

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spreadsheet- this was a spreadsheet in 1957 -and they tracked them. [spreadsheet pictured]

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well the index had something like 37 shares of Procter & Gamble, the 23 shares

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of Ford, 18 shares of IBM and so on. in the 1950s the S&P 500 totaled something

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like 40 maybe 50 bucks on a good day. at the end of each day the elves who worked

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dividends and send to the press a total which was published to more or less

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everyone who cared about investing. well not nearly even a century later the 40 [man reads newspaper]

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to $50 reign to the SNP is today knock on the door of 2,500 .so without even

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having dividends reinvested you'd have made 50 times your money with dividends

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reinvested to buy more shares instead of keeping the cash to buy you know

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groceries or electric massage slippers. you'd have made over 70 times your [grocery display case and slippers pictured]

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original investment. welcome to America.

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