CPMKTS Looks At Bigger Picture: Stocks, Bonds and Liquid Investments Simultaneously Reach New Highs.HOUSTON -- Contrary to popular beliefs about market dynamics, indexes measuring the total returns of all three components of U.S. capital markets - stocks, bonds and liquidity investments - reached new highs last week. Dorchester Capital Management, the creator of the Super-Macro Index CPMKTS The Capital Markets Index(SM), the first and only measure of the total return of the U.S. investment-grade stocks, bonds and liquid investments, today noted that CPMKTS, as well as the three sub-indexes measuring returns for each component, reached new highs last week - the first time this has occurred since May 5, 2006 In contrast, the company noted the widely followed Macro Market indexes did not uniformly achieve new highs last week. "While stocks and bonds may move in opposite directions, they often move in tandem Adv. 1. in tandem - one behind the other; "ride tandem on a bicycle built for two"; "riding horses down the path in tandem" tandem . However, before May 5, 2006, the last time all of the three major markets simultaneously achieved new highs was on March 23, 2000. This is in marked contrast to the late 1990s when the markets' total returns were more consistently positive in unison u·ni·son n. 1. Music a. Identity of pitch; the interval of a perfect prime. b. The combination of parts at the same pitch or in octaves. 2. ," said Warren Schmalenberger, Dorchester's founder and chief executive officer. "The fact these events went largely unreported may suggest it's time It's Time was a successful political campaign run by the Australian Labor Party (ALP) under Gough Whitlam at the 1972 election in Australia. Campaigning on the perceived need for change after 23 years of conservative (Liberal Party of Australia) government, Labor put forward a we re-evaluate the way we view markets and evaluate their performance. More specifically, it may be time to start looking at the bigger picture." The data used in the analysis is from Dorchester's extensive data base of the American securities markets. This database comprises approximately 240 million time series of data (items of information tracked over time). CPMKTS is one of the few Super-Macro Indexes to date and the only one to include stocks, bonds and liquidity. Super-Macro Indexes simultaneously measure the performance of several markets, using Macro Indexes (indexes measuring the performance of entire markets such as equities, U.S. Treasury Securities U.S. Treasury securities Interest-bearing obligations if the U.S. government issued by the U.S. Department of the Treasury as a means of borrowing money to meet government expenditures not covered by tax revenues. or investment-grade bonds Investment-grade bonds A bond that is assigned a rating in the top four categories by commercial credit rating companies. S&P classifies investment-grade bonds as BBB or higher, and Moody's classifies investment grade bonds as BAA or higher. Related: High-yield bond. ) and other Super-Macro Indexes as building blocks. Such indexes reflect performance of entire markets over time - a distinction from Micro Indexes, which look at sub-sets of information and are more inclined to fluctuations over the long-term. In brief, the three categories of indexes are as follows: * Super-Macro Indexes measure the performance of several markets simultaneously, using Macro Indexes and/or other Super-Macro Indexes as building blocks. They are the most representative of the possible choices for investors and consequently provide the greatest possible diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. . * Macro Indexes or major market indexes measure the performance of entire types of markets such as the equity market, the U.S. Treasury Securities market or the investment grade corporate bond market. * Micro Indexes, or portfolio security selection indexes, are those that look at portions of a Macro Index. For example, the equity market can be viewed by size of capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. , industry, growth, value or other characteristics. Each of these indexes looks only at a portion of a market and, therefore, should not be expected to perform over a longer time horizon in a manner like Macro Indexes or Super-Macro Indexes. All indexes are rules-based or systematic, meaning there is a transparent, recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. logic in their construction. Some indexes are completely rules based Using "if-this, do that" rules to perform actions. Rules-based products implies flexibility in the software, enabling tasks and data to be easily changed by replacing one or more rules. while others - generally Micro Indexes - are managed by a committee making "judgment calls" in addition to any relevant rules. Indexes managed by committee do not generally have the same degree of transparency. Additionally, all Super-Macro Indexes and most Macro Indexes are calculated using market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. weighting methods. Many new Micro Indexes, which filter or cull cull the act of culling. Called also cast. the market in different ways, have appeared recently. Micro Indexes can be calculated by using either capitalization-weighted methods or other methods such as equal weightings, dividend weightings, or weightings derived from income and balance sheet data. It is possible for these indexes to have greater returns than corresponding macro indexes in the same market due to their higher levels of risk. Previous highs and lows, as well as the current values for the CPMKTS family of indexes are as follows: [TABLE OMITTED] About Dorchester Capital Management Company Dorchester Capital Management Company is a Houston-based company focused on designing financial products for the professional investment community. The data used in the analysis is from Dorchester's extensive data base of the American securities market. CPMKTS The Capital Markets Index(SM), is carried on The American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. under the symbol CPMKTS, with data updates every 15 seconds. The Amex also publishes sub-indexes CPMKTE, CPMKTB and CPMKTL, tracking equities, bonds and liquidity. For additional information, please visit the company's Web site at www.cpmkts.com. |
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