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Jack_Dawson Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Aug-10-06 06:38 PM
Original message
How come when the Dow goes down 90 points...
and the Nasdaq stays still, I lose $500. But when the Dow goes up 50 points and the Nasdaq goes up 12, I only make $25?

:shrug:
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The_Casual_Observer Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Aug-10-06 06:40 PM
Response to Original message
1. Ever see the homes & salaries of the people who run mutual funds?
If you did you wouldn't be asking that question.
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Jack_Dawson Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Aug-10-06 11:56 PM
Response to Reply #1
4. Please
I can't tinfoil on the stock market. There have been days where the market went down and I kicked ass because of my REIT. All I'm saying is those days don't seem to be recently.

:beer:
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Not Me Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Aug-10-06 06:45 PM
Response to Original message
2. Damn, I have been asking myself that same question this year.
Identical shifts in the indices cause WAY different effects on my account balances....and never in my favor.
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skipos Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Aug-10-06 06:49 PM
Response to Original message
3. You need to invest more when we have a Democratic President
and less when we have a Republican one. I know this doesn't really answer your question but...

Democratic presidents historically yeild better economies. Forbes has some ratings of ecomonic properity that verify this.

"Not surprisingly, Bill Clinton tops the magazine's prosperity chart. He is followed by two other Democrats Johnson and Kennedy. The first Republican to show up is Reagan, who comes in fourth. No Democrat finishes lower than seventh (Truman), and the last three spots are all occupied by Republicans (Nixon, Eisenhower and George H.W. Bush). On a scale of one to eleven (one being Bill Clinton, eleven being the elder Bush), Democrats have an average ranking of 3.8, Republicans of 7.8."

http://www.americanprogressaction.org/site/pp.asp?c=klL...

That probably explains why democrats are better for the stock market too.

DOW SINCE 1901
Republican years Avg. annual change 6.9%
Democratic years Avg. annual change 13.3%
Source: Stock Trader's Almanac 2005

http://www.usatoday.com/money/perfi/columnist/krantz/20...
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Sammy Pepys Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Aug-11-06 09:18 AM
Response to Original message
5. Depends on what you're invested in
Dow and NASDAQ points are only indexes that represent a small portion of the stocks represented in those particular markets (although they are major issues)....they don't tally the gains or losses of individual stocks. Just because the Dow or NASDAQ is up doesn't mean that every single issue in those markets is going up too, or that they're all going up at the same rate...or that they're even going up at all.
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Jim__ Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Aug-11-06 12:05 PM
Response to Original message
6. The Dow Jones Industrial Average is based on 30 stocks
So, in some ways it's not a big sample to use to show how the whole market did. But, if you compare the changes in the Dow to changes in the S&P500 (based on 500 stocks) they track pretty closely - when I followed it, the change in the Dow was almost always 10 times the change in the S&P500 - much bigger change, but given the change in one, you can usually guess pretty close to the change in the other.

The Dow only follows 30 stocks; but the change in the price of those stocks are reflected in the DOW through a multiplier (or divisor). There are a number of ways that divisor is computed; but one of them is to keep the stocks balanced against the original value of the stocks that comprised the DOw, taking into account stock splits. You can probably find that computation on the Internet. Once I found it, I played with it a little bit, and the things you're seeing, even if you are only invested in DOW stocks are not that surprising - the multiplier distorts what you would expect to see.

I've neve looked into NASDAQ; but, my guess is that it has similar characteristics in how it computes changes.
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