The best index to watch in 2009
Today's Financial News - Posted January 9, 2009
Nasdaq has given investors the transparency the Treasury refused. The creation of the Government Relief Index allows investors to track all of Uncle Sam’s biggest bailouts. So far, you should be disapointed.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): The federal government is giving away trillions in taxpayer dollars. Every night, the evening news runs stories about this company or that company getting a bailout or at least lining up to be the next head into the feeding trough.
Outside of a few of Wall Street’s biggest names, it is nearly impossible to track the effectiveness of the money. Is it getting wasted? Is it creating wealth? Or is it merely prolonging the agony of corporate America?
Our good friends over at the Nasdaq Group are working to change the situation. The company announced that it has created the Government Relief Index (GRI). It is designed to give taxpayers and investors a better view into the success of Washington’s handouts. It will track the movement of every company that has received a billion dollars or more in relief money.
This will be good
Now we can watch the collective action of companies like General Motors (NYSE:GM), AIG (NYSE:AIG) and the countless banks rolled into the TARP. If we are lucky, companies in the adult entertainment industry, like Rick’s Cabaret (NASDAQ:RICK), that is asking for its own relief package will end up in the index.
Frankly, the way it is looking this week, the GRI could grow as large as the S&P 500 over the next year or two. It will certainly be watched just as closely.
There is no word on any ETFs designed to track the index, but you can bet they will be hitting the market soon. When they do, investors will go crazy playing all sides of the story.
After just five days of trading, the GRI is not keeping up with the overall equities market. It started the week at 982 and is currently sitting at 919, a drop of over 6%. The race is on to see if Uncle Sam’s investment portfolio can beat the Street.
Only time will tell. For now, put this index at the top of your watch list. It is worth keeping an eye on.
Next Article: A risky and volatile earnings season forecast
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