Dark Side of Deficits

Are we on the cusp of a secular bull market?

Does the economy and the stock market go in sync? Is one a leading indicator for the other?

How do you value the stock market? Forward P/Es or Reported P/Es?

And how will our current deficits affect the answers to all these questions?

This is one of the best articles of the year, packed with information for you to fully understand our current situation. For your convenience, I’ve highlighted what I think is most important.

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The Dow Jones Industrial Average is an unmanaged, price-weighted index of 30 large capitalization stocks with dividends reinvested.

The Standard & Poor’s 500 Index (“S&P 500”) is an unmanaged, market capitalization weighted index of 500 widely held stocks, with dividends reinvested, and is often used as a proxy for the stock market.

The Nasdaq Composite is an unmanaged, market capitalization weighted index of stocks listed on the Nasdaq Stock Exchange, and are reported as price return without reinvestment of dividends.

Indexes are often used as a proxy for the stock market and cannot be invested in directly.