Dian's Column
Dian's Archive


As the market falls Glenn Beck apparently says the end is near

By Dian Vujovich

A friend called last night to tell me that she’d just heard Glenn Beck say that the stock market was pretty much going to fall off a cliff either today or within the next couple of weeks. Those were her words, not mine. And since I don’t listen to Beck, I don’t know how accurate they are. But what I found most amazing, other than the fact that I really do have friends who listen to and believe what Beck has to say, is that his words troubled her. They threw salt on an already opened wound of worry about money and whether or not her family would have enough.

If there’s one thing TV yappers excel at, it’s scaring people. And for as much as people say there’s more to life than money, tell them that their bucks are going to disappear and their once happy-go-lucky personalities turn wretched. It’s not good—nor morally and ethically right– to prey on people’s fears. But some networks, communication personalities and sales folks make terrific livings doing so.

It’s Thursday, May 20, 2010 and the stock markets in Europe and Asia closed down over the night. The Dow Jones Industrial Average opened down as well. When I checked it a few minutes ago, it was already opened and was down over 200 points. It’s anybody’s guess as to the direction the 30 stocks that make up the DJIA will take today.

But what we do know about stock markets is that the prices on the stocks in them change pretty much every day, almost always every year, most definitely over time. We also know that there has never been one individual in the entire world who has consistently been able to call the markets’ directions accurately. Not one.

So let’s look at the numbers– they show the facts– and where stocks stood at the closing bell last night, May 19, 2010.

As you know I’ve been keeping an eye on the companies in the DJIA selling for under $20 a share for nearly a year now. Yesterday there were four of them. The same names, incidentally, that have been noted before. Alcoa, (AA), closed yesterday at $11.78 a share, over the last 52-weeks it has traded as low as $8.70 a share and as high as $17.60.

Bank of American (BAC) closed at $16.31, its 52-week range $10.57 to $19.86. General Electric (GE) has traded between $10.50 per share and $19.70 over the last 52 weeks and closed yesterday at $17.26. And Pfizer (PFE) ended yesterday’s trading session at $15.82. Trading range for the past year has been between $13.94 and $20.36. All numbers according to Yahoo Finance.

In the mutual fund arena, Lipper figures year-to-date through May 13 show that the average Diversified Equity Fund was up 5.98 percent. Small-Cap Value funds leading the way in that grouping—the average one here up 14.75 percent. The worst performing category over that time period was Diversified Short Bias Funds, down on average 11.43 percent.

Move into Sector Funds and Real Estate Funds have performed the best and the worst. The average U.S. Real Estate Fund was up on average 17.74 percent. The worst performers were International Real Estate funds, down 6.49 percent.

We all know that the world is in a bucket of hurt financially, those International Real Estate funds show that, so does the average return on World Equity Funds. The average in this grouping was down 2.69 percent.

If investing in the stock market is something you’ve chosen to do with some of your money, you must accept that fact that price volaitility is a very real part of the game. If you can’t accept that fact— or emotionally take it—get out of the market. There are plenty of other ways to build a nest egg other than via the stock market. As for Glenn Beck, if his words are emotionally upsetting to you as well, turn him off. That’s easy enough!

To read more articles, please visit the column archive.

[ top ]