The Stock Markets: My Theory

WARNING: Let me preface this blog post by saying that although I am a CPA, I am not a professional investor nor adviser. You should take all of this post with a huge grain of salt :-)

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I have always wondered why the three major stock market indices (DOW, S&P and NASDAQ) always move in concert with each other, generally moving up and down in unison. How is this possible when each has a unique group of stocks? Aren’t there masses of stock pickers buying/selling individual stocks? It just doesn’t make sense…or does it?

Now, if you read the market news, it will say the markets went down because of blah blah blah and the next day the markets rebound because investors ignored blah blah blah. Why would, say, good news for the housing market make the tech-heavy NASDAQ rise? Read more