Three Consecutive Years of Positive Breadth!
PSSST... but the major market indicators are still down 15%
Issue Breadth Statistics are the single most reliable indicator of what is going on in the stock market --- daily, monthly, annually, whatever. Clearly, if more issues are going up in price more often than down, most of the time, for a meaningful period of time, so should the Equity Bucket of the investment portfolio. Historically, NYSE Issue Breadth Statistics have never been individual-equity-only statistics, and today, they count more derivative "products" than anything else.
IGVSI "breadth statistics" signal changes in direction within the Investment Grade Value Stock universe alone --- all CEFs, ETFs, REITs, and preferreds (and individual issues that are NOT investment grade) are excluded. Issue Breadth Statistics should allow investors to look inside an index to obtain a better feel for what has been going on --- these numbers will help you do just that.
Cumulative issue breadth figures were negative from June '07 through February '10 --- roughly thirty-three months, and a longer than usual correction. In March '09, we soared into the black and the up trend continued through 2011 --- perhaps the best two years in a row ever!
But 2011 was only about half as strong from an "issue breadth" perspective as the previous two years --- something to be aware of.
May through September 2011 was the most severe downturn since 2008! Then, instantly, an upward only October that that will probably make the record books. From an issue breadth standpoint, the stock market went on vacation through year end --- but trading was seriously more exciting than the month-end breadth statistics, and the surge in CEF prices produced magical profits in the (generally boring) income allocation "bucket".
If your portfolios (equity and income) are not well above financial crisis lows (March '09), perhaps you should try an old approach --- MCIM has been outperformin MPT for forty years.
What does all this mean? See the Investment Grade Value Stock Expectation Analyzer.
