When you hear that the stock market is up, which "market" do you mean? Today's a great example of how confusing that statement can be, as you can point to three different markets with three totally different results:
- The Dow Jones Industrials
are up by triple-digits today, again challenging the 13,000 level. (INDEX: ^DJI)
- The S&P 500
is also up, but only by about a quarter-percent. (INDEX: ^GSPC)
- The Nasdaq Composite
is down 0.4%, as Apple is falling almost 3% as the stock corrects from its huge move up so far in 2012. (INDEX: ^IXIC)
So even on a day when the Dow is moving higher, your portfolio may well be up sharply, roughly flat, or down a lot today. It all depends on which "markets" you focus on.
In addition, owning Dow stocks doesn't mean that your portfolio will move in lockstep with the Dow. One thing about the Dow is that a small number of stocks can have a big impact. For instance, Caterpillar
Know your market
There's no substitute for focusing on the particular companies you own. As earnings season gets under way, you'll have opportunities to see how your companies are doing and what their future prospects look like. Let me invite you to get some insight from the Motley Fool's brand-new special report, which identifies five stocks that investors simply have to watch this earnings season. The report is free, so let me invite you to click here and get the scoop before these companies report.
Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter here. The Motley Fool owns shares of Apple, Citigroup, and Bank of America. Motley Fool newsletter services have recommended buying shares of and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.
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