Few Companies Trading Stocks These Days [AUDIO]
There are fewer companies trading fewer shares today as compared to recent years. Some suggest that explains, at least in part, why markets have seen such big gains.
At the end of last year, 5,008 stocks traded on U.S. exchanges, down 44 percent from a peak of 8,884 in 1997, according to the World Federation of Exchanges. Also, the total number of shares of stock available for trading is down almost 10 percent over the past four years.
Some observers say with more money chasing fewer shares, stocks have been rising. Stock expert Nick Ventura disagrees, however.
"I'd argue against that," said Ventura, who serves as president and CEO of Ventura Wealth Management.
For one thing, he says we are a lot more "global" now than in the past, "so investors had a lot more options on the world sphere."
"World market perspective has given investors a lot more trading options beyond domestic stocks," Ventura added.
Ventura also suggests that following the "dot-com bubble collapse" of the late 1990s and the 2008 recession, there's been a "thinning of the herd" of companies, leaving investors with a more solid group of surviving firms.