The way to understand how the stock market works is by looking at the stock market chart. The stock market chart shows how all the stocks of companies are performing. In your retirement account these companies are in the mutual funds. The same companies in your portfolio are in the S&P 500 Index which is the stock market. Do you have 401K Advice?
 
To pick the best mutual funds in your retirement account is to look at ones that are performing the best over the past 6 months. Next is to set the time frame for months.

When most or all stock prices are starting to decline, it is the sign that investors are selling. Companies sell stock when no money is made

The stock market is losing money when it is below the year low. The 1 year low means the stock market price is below the same price it was 12 months ago. In your fund less money was made. When the stock market is above its 1 year low in the past 12 months you can rest assure that the stock market has stopped declining.
 
The 1 year average is the average price over the last 12 months. As long as the stock market is above its 1 year average this means the stock market is rising and you are making money in your IRA and 401K.
Have you asked your self, what is your asset allocation? 
This all points to our economy. Our economy is base on the gross domestic product. This is the increasing and decreasing of services and products that are produced by business services in the USA. The Government have Economist study how the U.S. economy is performing every month. These reports show how the manufacturing of products, employment, business services and retail goods are performing currently and in the past. It easy to see if the USA economy is in a recession by comparing it to the stock market.

Investing points are:

A. The same companies in a IRA and 401k plan are in the S&P 500 Index which is the stock market.
B. This is the most watched index.
C. A handful of stocks from mutual funds is a portfolio.
D. View the chart of this index using the month to month price and not the day to day price.
E. It has to be above its 1 year low because this means the stock market is no longer dropping.
F. It has to be above its 1 year average for the stock market to be rising up. The 1 year average is the average price over the last 12 months.

Having investment advice will give you an understanding on how the stock market works.

This entry was posted on Thursday, October 15th, 2009 at 2:35 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.