One day in 1884, Charles Henry Dow averaged the closing prices of 11 stocks he considered representative of the U.S. economy in a paper that preceded The Wall Street Journal.

Probably the most broadly based market index is the Wilshire 5000 Total Market Index. Originally comprising 5,000 stocks, the Wilshire 5000 now includes the stocks of more than 6,700 publicly traded companies. This market capitalization-weighted index tracks the overall performance of stocks actively traded on the American stock exchanges; the companies are all headquartered in the United States.

If your portfolio lags substantially behind a corresponding index, it may be time to reevaluate and reallocate assets. Be sure to select an appropriate index as your benchmark. For example, comparing a small-cap stock portfolio to the Dow Jones Industrial Average may not be very meaningful; comparing it to the Russell 2000 Index would be more appropriate. When selecting stocks, it’s prudent keep an eye on promising long-term performance based on certain fundamentals that may or may not be subject to market trends.

Mutual funds are sold only by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

The stock market is inherently extremely volatile. The return and principal value of stocks fluctuate with changes in market conditions. Stocks, when sold, may be worth more or less than their original cost. Is it a safe place for your retirement money? Or should you shift more into a money market fund offering a stable but lower return?

The Dow is an index of widely held “blue-chip” stocks that is used as an indicator of the performance of U.S. industrial stocks. Unlike most other major indexes, the stocks in the Dow are unweighted by market capitalization. The 30 stocks included in the Dow are all major factors in their industries. Many have become household names: American Express, Boeing, Coca-Cola, General Electric, Hewlett-Packard, IBM, Intel, Johnson & Johnson, McDonald’s, Microsoft, Procter & Gamble, Walt Disney, and Wal-Mart.

Because some stocks influence the market more than others, each stock is given a different weight when the calculations are made. This is called “market-capitalization weighting,” which is the type of weighting used for the Nasdaq Composite, the Wilshire 5000, and the Russell 2000. Over 70% of all U.S. equity is tracked by the S&P 500.

Learn more about Market Timing Services. Stop by Arthur McCain’s site where you can find out all about it and what it can do for you. http://market-timing.org/service.aspx