The IGVSI is a barometer of a small but elite sector of the stock market called Investment Grade Value Stocks.  Some IGVSs are included in all averages and indices, but even the well dressed Dow Jones Industrial Average includes several issues that are well below Investment Grade and very few boast an A+ rating. The S & P 500 contains about half the IGVSI selection universe, which tracks a portfolio of  less than 400 stocks. 

The IGVSI peaked at 900 in the summer of 2007, but with the crisis that erupted in the financial sector, a steep decline followed. On May 2nd, 2010, the IGVSI was within 6% of its all time high --- and then, a "stock market only", plain vanilla, this-is-what-it's-supposed-to-do, correction began. I should not be the only person who's happy!

The 4th Quarter 2008 was the worst calendar quarter  in recent stock market history; 2009 may well have been the best year in recent stock market history--- especially for Market Cycle Investment Management program portfolios. The IGVSI gained roughly 33% in 2009, the S & P 500 about 24% and the DJIA just 19%.

In spite of rapidly falling interest rates, the prices of rate sensitive CEFs were pummeled even as the prices of some individual income securities reached "bubble" levels. Strangely, fearful investors chose low yields and high prices over high yields and lower prices. 

This irrational activity improved CEF profitability during the downturn! As financial market conditions stabilized and improved, the market value growth in income CEFs has been spectacular--- and the bubble potential of treasury securities seems--- well, think about it. CEF market values have risen 70.3% since March 9th 2009, and are still paying out over 6% (tax free) and up to 9% (taxable)!

History of the Investment Grade Value Stock Index

The IGVSI was developed in December of 2007 to provide a benchmark for the Equity portion of MCIM portfolios managed using Working Capital Model (WCM) disciplines. For more than ten years, Investment Grade Value Stock investors had been frustrated by the inadequacies of the DJIA and the NYSE indices. During that period. NYSE Issue Breadth and New High vs. New Low Statistics moved in different directions than the averages, nearly all of the time.

Since 2005, the popularity of Closed End Funds (particularly the index variety) has altered the statistical playing field, making NYSE "market stats" nearly worthless in monitoring the behavior of  Investment Grade Value stocks. There are fewer than 400 IGV stocks, yet the NYSE "issue breadth" numbers report trading of over 3,000 issues per day. Similarly, the "most advanced" and "most declined" lists contain an ever increasing number of indexed derivatives, making it difficult  for IGVS investors to zoom in on their area of interest. 

Hoping to answer the now ludicrous question: "whatever happened to stocks and bonds?", several old school diagnostics are presented here. The IGVSI chart tracks the most fundamentally sound companies on the planet. The IGVSI "Bargain Monitor" analyzes the prices levels of the index components to help you navigate the investment cycle for better decision making. IGVSI Issue Breadth and 52-week "High vs. Low" numbers help to complete the equity environment trend picture, and the "Expectation Analyzer" discussion will help you fine-tune your portfolio performance expectations.

Two other indices, the Working Capital Model Select Income (WCMSI) and the Working Capital Model Select Municipals (WCMSM) report on the movement of managed closed-end income funds of the type contained in Market Cycle Investment Management portfolios. They should help you fine tune your performance expectations about the income bucket of your portfolio --- both have climbed sharply (an average of 40.9% since December 31st 2008). 

All of these important numbers are presented for your use right here, but what you do with them is totally up to you.

The IGVSI is a new index, but one that is becoming an accepted benchmark for assessing the performance of the "Equity Bucket" of MCIM-WCM investment portfolios. 

The income portion of a portfolio demands separate attention, and a pretty much blind focus on income. Click here for a helpful article on that subject, or study Chapter Five of The Brainwashing of the American Investor:  "What Your Mother Never Told You About Income Investing".  The WCMSI is presented with the IGVSI to give you a feel for what is going on in the income portion of your investment portfolio --- the WCMSM examines a sampling of closed-end Municipal Bond funds.

Before you open your monthly account statement, have a look at the Investment Grade Value Stock Expectation Analyzer.

NOTE: Average performance of IGVSI, WMCSI, & WCMSM: 12/31/08 to 12/31/09 = 34.3% vs. DJIA + S& P = 21.5%