Are stock Indexes just illusions of mystical gains?
Throughout this financial crisis many have tried to figure out what is really happening and there is news a plenty that can cause a reasonable person to wonder if our policymakers know any more than the rest of us.
For example this headline:
The iconic food company, which will be renamed Mondelez when it spins off its North American Grocery business later this year, is expected to have a smaller market capitalization and will generate less revenue from the U.S.
Those both make Kraft “less representative of the U.S. Large Cap market space,” the Dow Jones Averages Index Committee said in a statement on Friday
For those inside the financial business the editing of companies which make up the stock indexes like the DJIA, S&P or NASDAQ is common knowledge, it happens at least yearly. An under-performing company or like in this case one that is expected to under-perform are removed and replaced.
Keep this in mind when you watch the “market indexes” increase and ask:
Are things really improving or is it just an illusion created by those behind the curtain?
With all this in mind it is wise to keep your retirement dollars out of harms way.