Don't Look At the Market - Look At Stocks
by Charles B. Carlson, CFA
Dow Theory Forecasts

Too often investors miss opportunities because they are looking in the wrong place.

Indeed, it is understandable these days to focus exclusively on what the market is doing - is the Dow up? Is it down? Will the Nasdaq Composite break below 1000? When will the S&P 500 bottom?

The problem with focusing on the market indexes is that you miss out on opportunities in individual stocks that may be offering good values regardless of what the overall market is doing.

For example, even though the market has been beaten up rather severely this year, there are still plenty of stocks that have shown good price resiliency. These are the types of stocks that oftentimes lead markets higher when the upturn occurs.

Some sectors that have held up well include information services, drugstores, and real estate investment trusts. I would suspect these groups to continue to do well.

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