Bellwether or Barometer Stocks
Bellwether or Barometer stocks are stocks which are considered as the indicators of overall market or market sector. These are stocks of big companies which are the leaders of particular industries, and ups and downs of which produce corresponding changes on that and related industries. Some very good examples of bellwether stocks include General Motors – automobile industry, Microsoft – software sector, Wal-Mart – retail sector, etc.
Bellwether is a term which denotes the sheep with a bell which leads rest of the flock. Finding and keeping track with bellwethers is vital from an investment point of view as most other stocks of the industry tend to follow them; whenever bellwether go upward, others too go up and vice versa. Most of the barometer stocks are blue-chip stocks with high market capitalization and investing in them offer high-return and low-risk; and is a major tactics followed by growth investors and CANSLIM investors.
Bellwether stocks also produce a profound effect of a nation’s economy. For example any news which related to General Motors not only influence automobile industry but also steel and other metal industries, financial sector, oil and energy industries, retail industry and so on; there for the saying “What good for GM, is good for America”. There can be more than one barometer stock available for one industry/sector; and also it is not necessary that trends of all other stocks of the industry follow that of the barometer stock of its industry.
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Bellwether is a term which denotes the sheep with a bell which leads rest of the flock. Finding and keeping track with bellwethers is vital from an investment point of view as most other stocks of the industry tend to follow them; whenever bellwether go upward, others too go up and vice versa. Most of the barometer stocks are blue-chip stocks with high market capitalization and investing in them offer high-return and low-risk; and is a major tactics followed by growth investors and CANSLIM investors.
Bellwether stocks also produce a profound effect of a nation’s economy. For example any news which related to General Motors not only influence automobile industry but also steel and other metal industries, financial sector, oil and energy industries, retail industry and so on; there for the saying “What good for GM, is good for America”. There can be more than one barometer stock available for one industry/sector; and also it is not necessary that trends of all other stocks of the industry follow that of the barometer stock of its industry.
NobleTrading.com Offers Online Stock Trading, Online Options Trading
Online Futures Trading, Online Forex Trading
Worldwide Brokerage Service, Day Trading Brokerage
posted by Daniel Pipitone at
5:26 AM
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