It will be time to break open a bottle of Dom Perignon and light up a Macanudo. For the fifth consecutive year, if things hold up, the U.S. stock market will have achieved gains in the double-digits. Even better for Wall Street, it has been another record year for IPOs and mergers. For investment bankers this is as good as it gets. Yet all is not well for fund managers and investors.
Mutual funds are under-performing the major indexes.
It has become more difficult to make money in a stock market that acts more like a wild bungee ride. What s more the number of stocks that are under water are at near-record levels. On a daily basis there are more stocks declining than advancing a condition that has existed since April 1998. In addition to the number of stocks that are declining, the number of companies that are reaching record lows far surpass the handful of companies that are achieving record highs. While the focus is on the major indexes, such as the Dow and the Nasdaq, the less-mentioned Russell 2000, Wilshire 5000, or the unweighted Value Line Indexes are treading water or are actually negative for the year.