The Stock Market is not the Economy

Each year, Franklin Templeton Investments asks 1000 investors whether the S&P went up or down in the previous year. We live in the age of CNBC and Yahoo! Finance and iPhone apps; where no one lacks the data to know a simple statistic like whether the market went up or down. Yet year after year, the survey shows that swarms of investors are utterly clueless.

  • In 2010, 66% of investors said the S&P 500 fell in 2009. Yet it was actually up 26.5%
  • In 2011, about half of the investors said the market fell in 2010. Yet it was actually up 15%
  • In 2012, 53% of investors said the market fell in 2011. Yet it was up 2%
  • Just recently, 31% of the investors said the market fell last year. Yet it was up 16%.

Mind –boggling, isn’t it? The problem is that people associate the economy with market returns imagining market performance is related to their own economic confidence or linked to their own desire to invest.

The bottom line is that the current economy does not reflect what “Mr. Market” is doing. The market is forward looking and investors base their opinions using a rear view mirror.



About billriley

Chief Executive Officer, Chief Compliance Officer A co-founder and shareholder, William Riley is a 33 year industry veteran, who observed, many years ago, that over time institutional investors typically outperform individual investors while accepting less risk. In his role as Chief Executive Officer, Bill works tirelessly to make the wealth management strategies used by the world’s wealthiest families and largest institutions available to our firm’s individual clients. Bill combines fundamental and technical analysis to minimize investment portfolio risk and maximize potential returns. He uses a variety of non-correlated asset classes, including alternative investments, to minimize portfolio volatility and seek absolute returns in down or flat markets. Finally, Bill believes in a comprehensive approach to wealth management that fully coordinates and seamlessly integrates portfolio management, risk management and asset protection, trust, estate, tax and charitable planning. Prior to co-founding Riley Wealth Management ,LLC, Bill held management positions at Merrill Lynch, UBS, Raymond James, Paine Webber and J.C. Bradford. Bill founded Fort Worth branches for Raymond James and J.C. Bradford. Prior to entering the financial services industry, Bill ran his families closely held businesses. Bill’s experience operating family businesses combined with his wealth management experience makes him uniquely qualified to advise entrepreneurs and business owners on a variety of matters including complex and sensitive issues relating to business succession. Bill’s degrees and designations included a Masters Degree in Business Administration (MBA), the Chartered Financial Consultant designation (ChFC), the Chartered Life Underwriter designation (CLU) and the Wealth Management Specialist designation (WMS). A Fort Worth native, Bill is a TCU alum and active in many civic and charitable organizations. Bill and his wife, Marsha, now reside in Colleyville, and they have four grown children and four grandchildren. When he is not working on portfolios or studying financial markets, Bill can be found on the golf courses of Ridglea Country Club.
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