The incredible shrinking stock market

The number of choices available to investors is in a long-term decline. Companies are getting bought out or delisted, and the IPO market remains shaky.

By Kim Peterson Mar 29, 2013 2:27PM
Image: Stock market (Digital Vision/SuperStock)The pool of stocks available to investors is shrinking. At the end of last year there were only 3,687 stocks, as measured by the Wilshire 5000 Index ($W5000), USA Today reports.

That's down from 4,008 in 2010 and 6,639 in 2000.

This trend has worried Wall Street watchers for years. Stocks are disappearing for several reasons, but you can blame the huge number of mergers and private-equity buyouts for much of the action. Dell (DELL), US Airways (LCC) and OfficeMax (OMX) are some of the names jumping off the stock market this year.

You can also blame Facebook (FB). After the social network's disastrous IPO, other companies that had been mulling offerings backed away. There have only been 31 IPOs priced this year, a 26% drop from last year, according to Renaissance Capital. And 35 IPOs have filed, nearly a 24% decline from last year.

Analysts with Renaissance are more optimistic about the rest of the year, saying the strength of the market should propel more IPOs forward.

Some of the biggest IPOs of this year include Zoetis (ZTS), the spinoff of Pfizer's (PFE) animal health care business. Investors may also recognize Pinnacle Foods (PF) and Norwegian Cruse Line (NCLH).

The decline in listings could make the stock market more irrelevant as an economic indicator, Reuters' Felix Salmon notes:
It’s pretty clear that the total number of stocks peaked with the dot-com bubble, and is now on a long-term secular downtrend. As a result, the stock market is increasingly failing to act as a proxy for the economy as a whole. Which is one more reason to stop obsessing whether or the stock market is up or down. That never mattered much, and it will matter even less in future.


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113Comments
Mar 29, 2013 3:33PM
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Why in hell would we gamble away our life savings to the market, which, btw, is being propped up ONLY by cheap printed money, and manipulated by large hedge funds only to watch it evaporate when the big boys abruptly decide to stop the music.
Mar 29, 2013 4:21PM
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The plain and simple truth is we can't sustain this level of spending.  The real problem comes in when you have to decide what gets cut.  There is no easy answer.  We all have to suffer cuts.  There is not one politician who can tell you a solution because they want to get re-elected.  We need to enact term limits to have the politicians who are serving their last term decide that they should do what is right for the people rather than what is the best polling position to take. 

 

Ultimately you can cut entitlements, you can raise taxes, you can help the poor and punish the rich- none of it will matter until we spend less than we take in. 

Mar 29, 2013 3:33PM
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huh?? incredible shrinking stock market????!!!!, how about the incredible shrinking GDP??!! how about the ever increasing debt and expanding WELFARE STATE!!!

 

check this UTTER AND COMPLETE FRAUD OUT!!: the new "welfare" is "disability" your back hurts, can't work? doesn't matter if you're actually in a wheelchair, no you qualify! no prob here's some taxpayer money, your kids' a dope?? can't learn in school? no prob here's a check courtesy of the taxpayer, aka hard-workin' stiff, that's a $1000 per stupid kid!!! but wait there's more, your kids' got ADHD (a bullshiiit liberal phony madeup condition by the way) he or she's basically a BRAT!! no prob here's some cash! your depressed? awwww, no prob, you qualify, don't worry here's a check from the stupid workin' stiff again, workin' his way out of the American dream and into poverty and mediocrity, outrageous!!!!!!

 

and all this is courtesy of the pig Marxist in chief barrack hussein osama obama himself, now you wanna talk 'bout some stupid delisted companies and shaky IPO"s again!! who the fuuuck cares!! there's a severe unemployment problem here in this nation!! and the only people gettin' rich are the very same companies the liberals are bitchin' and moanin' bout!! crony capitalists friends of that muslim pig in the disgraced white house, Olypmus Has Fallen all right, bout 5yrs ago now!! add the expanding welfare state and add the new "disability" welfare to it and you've got 30 plus million people on the taxpayer dole!! that's $260BiLLION taxpayer dollars per year going to the parasitic lazyazzed obama voter!!! we can't sustain this!!!! and my God we're sooooooooo fuuuuuucked!!! tooooo fuuuuucked!!! and you pathetic self-loathing Jews and guilty whites are primarily to blame, your tooooo fuuuuucked as well, at least there's some justice in that fact!!

Mar 29, 2013 3:15PM
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"Which is one more reason to stop obsessing whether or the stock market is up or down. That never mattered much, and it will matter even less in future."

LOL.  Doesn't matter much?  Sure as h_ll matters if you have money in the stock market.


Mar 29, 2013 4:27PM
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that awkward moment when you realize grandma makes better investment decisions than you by putting her money under her mattress. The most she stands to lose is the 2-3% annual inflation. 
Mar 29, 2013 4:55PM
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OK,  what I would like to see is the average investor get out of the market, and leave it to the sharks to feed on themselves, and use their own money, instead of everyones IRA's and 401`k's.
Mar 29, 2013 4:50PM
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Who really cares ?  The market is so overwhelmingly rigged against the individual investor that only a few lucky ones ever actually make any money. I've been in it for years, every time I have been up it vanished overnight and I had to play the waiting game to get back to where I started.  In the middle of that yet again. OK, the market hit new highs, but what stocks went up with it ?  Many of the big stocks are actually down !   One of the talking heads on a financial TV station actually wrote a book entitled "Getting Back to Even".  That is evidently not as easy as one might think. At least with cash in the bank it's always there.....it doesn't go away overnight because some hedge fund manager sold out !
Mar 29, 2013 6:29PM
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Like Kenny Rogers song "The Gambler" says "You got to know when to hold them and know when to fold them".

 

Nothing to do with current administration, but as the stock market ebbs and flows we need to protect our finances.

 

The tide is about to turn in it's roughly seven year cycle from it's ebb in the '07 to peek flow in '12 -'14 and believe me I have been at this a while.

 

In the past year I've taken from my retirement account 35K to live on (No mortgage, no credit balances) and my account is still worth 25K more than it was worth 12 months ago.

 

I see the writing on the wall and know to pull my investments as soon as the market starts it's ebb with in the next 12 to 24 maybe 36 months.

 

The market has been awesome recently but it's only a matter of time just like in '06.

 

Again I'll hide and diversify all my manageable assets just like the big boys, after all they seem to stay on the positive side no matter what. It has always seemed to work.

Mar 30, 2013 12:15AM
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I'm no wall street insider. i'm a low-level clerk of average intelligence, But i've been making money year after year because of the stock market. The secret is financial education. Read books for example: One Up on Wall Street written by Peter Lynch. I spend an hour every day analyzing stocks. This is what I do for fun. Invest long-term on good, strong dividend paying companies.

If you don't have the time to analyze stocks, invest in the DOW JONES INDUSTRIAL AVERAGE which returns around 10 % per year if dividends re-invested. How? There's a low cost ETF called the DIA which follows the movement of the DOW JONES INDUSTRIAL AVERAGE. Buy the DIA, Re-invest the dividends every year. Ignore the fluctuations of the stock market. If you invest 20 thousand at age 21, at retirement at age 65, that will have grown to around 1.28 million. Avoid exotic financial instruments you don't understand. There, I'm already spoon-feeding you guys. I want you to succeed, i really do.

Mar 29, 2013 9:24PM
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The real problem in this country is lack of financial education. People are so afraid of losing money they never take a chance. Their fear of losing is greater than their fear of winning. It is about managing risk. And the way you manage risk is through financial education. You think Coke is a bad investment? Proctor and Gamble? The stupid smart phone bill you pay everyday? AKA Verizon and AT&T. That is why you will always complain about money and never having it. Because instead of investing in solid "assets" , like stocks, the average person would rather spend an extra $150 a month on a cell bill and HD TV etc. Stop whining that the market is rigged and do something about your financial situation and stop blaming someone else for your lack of financial education.
Mar 29, 2013 3:13PM
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The shrinking number of stocs for investors to buy (the mega-companies buying their competition) is one reason why the price of these remaining stocks rise in the abscence of a healthy economy.  I would submit, less competition is one reason the economy is so bad.
Mar 30, 2013 12:08AM
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Noticed a statistic the other day.  300,000 homes US wide in 4 closure.  Average time of a 4 closure is 900 days.  If each home is $300,000 that would be $90 billion dollars.  Where is the $ Trillions that were needed to save the banks that had the mortgages and where has it gone.

Mar 30, 2013 11:27AM
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America, as a whole, you are denying yourselves that the Socialism you crave ,just doesn't work and, I regret to say, it looks like it may cause a separation of our union into separates unions such as Western States of America, Eastern States of Amercia, Southern States of America. People are leaving California because its too Socialist. Look up the numbers. Good Weather doesn't keep them . My parents left an oppressed place outside the USA, and it had weather like Hawaii!

 

America, as a whole, has a debt equal to 105% of our GDP. Greece was at 150% before it went belly -up. Japan is at 200% and their economy hasn't moved in 20 years.

I see in California ,all the time, people making 150,000 dollars a year ,still can't afford to live. That's what extreme socialism does.! Jacks up the cost to live! And they want more ,more, more,socialism!

 

 But it does seem inevitable.You want your socialism to be the saviour. When it doesnt work ,you will blame it all on the rich. even though the rich pay most of the tax revenue for your socialism.

The stock Market isn't a good sign of the economy any more because Uncle Sam is TOO BIG! It is sucking economic growth away from the people and into our grandchildren 's debt. Just like Spain,Greece,Italy,Ireland,and tiny little Cyprus

Mar 29, 2013 6:39PM
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The only people who should be in the stock market are people who can read financial

reports.If you can`t do that put your money in CD`S and be thrilled to get 1%.There`s

too many idiots who are constantly predicting bear markets who can`t walk and chew gum.

Mar 29, 2013 2:44PM
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The first "credit card" was the BankAmericard. (Now VISA I think)  If you banked with them and were late with your payment, they simply removed it from your account without your authorization or knowledge.  This was 40 years ago!  And, they told customers that their checks were covered if they overdrew, but they forgot to inform them that the receiver also had to be a Bank of America customer for this to occur.  More than one of our customers had this problem as the business I worked for was not B of A customer.  They have always left major loopholes out of the knowledge of customers.  Never had an account with them as was warned by people who did too often!!  Had Wells Fargo account  and can say we had no trouble with it, but went to a local bank as they had bank by mail.  This was also 40 years ago.  We now live in Ohio and have neither bank here and are also with a local bank.  So far so good, but did manage to have our first bank eaten by what is now Key Bank, another one to stay well away from.    
Mar 30, 2013 2:48PM
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Ok, we are slowly making cuts. But who do they cut? Can't take a crap in the national parks - closing restrooms to save money.
Michelle Obama to spend how many millions on her 50th birthday party next January.
Next time you need to crap do it in DC


Mar 30, 2013 2:00AM
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Beware, the Ponzi scheme still continues with an inflated and overvalued market propped up by the Fed Reserve's QE's. The market is booming with Wall Street smiling and Main Street still sucking eggs.

 

Forget about the DOW and the government hype, just look at the national debt which is the true indicator of our country's economic and financial health.

 

Hang on to your butts because that's all you will have when it all collapses.

Mar 30, 2013 9:15AM
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Anyone that thinks they are actually ahead in this market needs to learn how to do some pretty simple math. Yes, the stock market is at an all time high. Big deal. Now, go back to 2006 - 2008 and work the numbers forward adjusting each consecutive year for inflation and devaluation of the dollar and tell me where you come out. I'll save you the trouble. What you will find is that in real dollars the market and your money is down by over 30%, pushing the better part of 40% actually, in real dollar value.
Mar 30, 2013 5:35PM
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I hate to say it, bad language aside, but SRTdriver makes more sense, more American sense than all the crap coming from Washington for the last 50 years!!!  And that includes the lousy American Press.  What an excuse for news ABC, NBC, CBS, CNN, HNN, etc.  It is an embarrassment.  Too bad most Americans cannot, or refuse to, or are not educated enough to think objectively about why and how America has always moved forward.  As I have been saying for at least five years:  We are in sooo much trouble.  So many people with there heads in the sand!  I just wish we could just get to the next crisis just to get it over with!
Mar 29, 2013 4:24PM
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The Government should tax these day traders at 60 % they are destroying the markets for people who want to invest but in horror watch their stock go down  day to day. There are no more long term investments. what I say to these day traders I hope you all burn in HELL ...
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