AAII - West Suburban Sub-Group in Naperville, IL . . . Newsletter & Information Blog

Saturday, May 27, 2006

How To Read Barron's

There are several good daily financial newspapers that any investor can read such as The Wall Street Journal, The Financial Times, or Investors Business Daily, but these can often be more distracting than helpful.

Reason: Daily newspapers explain why the Dow Jones Industrial Average (DJIA) went up or down the day before. They study the daily fluctuations so closely that the average investor may overlook a more important week long or month long trend.

This is why I believe that the average investor can benefit greatly by reading Barron's, the weekly financial newspaper that comes out every Saturday morning. Here are the things to look for in Barron's...

Stock market trends. First, there is a wealth of data contained in the section called Market Laboratory. Here you can focus on the relative performances of the DJIA...the S&P 500 Index...the NASDAQ composite index...and the Russell 2000 Index, which comprises the best-known small-cap companies. This is where you may be able to spot some market trends early - such as when one index suddenly begins to outperform the others.

Mutual fund track records. The Lipper Mutual Fund Performance Averages pages in Barron's can be especially helpful. They track performance by mutual fund type for several different periods.

Looking at the mutual fund tables, an investor can quickly gauge how his/her funds are performing relative to their peers as well as to funds in other categories.

Money market fund yields. This table helps you see how the funds you own compare with industry averages. You can also see how the rate of the average tax exempt fund compares with the after-tax yield of the average taxable fund.

Insights and analyses. Columns on the stock market, bonds, international markets and real estate help to give you the big picture, as well as a sense of what long-term trends may be unfolding.

Opinions of great minds in interviews. Barron's has access to the best investors around, and you should want to know what they're thinking. If two great investors like Mario Gabelli and Peter Lynch suddenly begin seeing the same emerging theme, then investors should take notice and start tracking the trend.

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