What is a Barometer Stock?
Sometimes referred to as a bellwether, a barometer stock is simply any stock or bond that has demonstrated a history of being a good indicator of the current market conditions. Barometer stocks also tend to be a good pointer in which direction the market is likely to go in the short term. Identifying a barometer stock takes some effort and time. Here are some tips on how to tell whether a particular bond or stock can be used as a solid indicator stock. One of the things to keep in mind about all stocks and bonds is that there is some fluctuation involved. This may be with interest or dividends generated, or it may be in base value. While some stocks and bonds seem to respond more to factors that tend to be localized and not of much impact on the market in general, others types of investment stocks demonstrate a history of moving right along with the general condition of the market. These are the types of stocks that can be properly identified as a barometer stock. In order to begin the
