Our research analysts follow more than 2,500 economic and investment series. We continually look for new data that represent the changing nature of domestic and world business conditions. Due to changes in technology and government legislation, some investment indicators become outdated and must be replaced by new series, many of which we have developed. These efforts have resulted in original and proprietary approaches to studying the stock market over the years, including the Dual Market Principle and sector analysis developed by Kenneth Safian and his staff in the early 1960s; our Composite Forecasting Index, in 1984; and the Safian Market Benchmark, in 2000, among others.
Composite Forecasting Index (CFI)
Developed in 1984, this leading economic forecasting index contains five major component groups made up of 28 individual leading business series. The CFI correctly signaled the 1990-1991 recession in 1989, 2001 recession in August 2000 and the 2008-2009 recession in July 2008. It has also predicted stronger and weaker segments of the business environment. The CFI is issued monthly and followed by government officials.
Safian Market Benchmark
This stock market index was first introduced to the investment community in 2000 at a presentation to the New York Society of Security Analysts. Various articles in the press have noted the misleading characteristics of the popular stock market averages. The SIR Market Benchmark is weighted, as best as possible, to the U.S. Gross Domestic Product (GDP) data. In this way, the Index represents general business conditions. This Index is rebalanced once a year based upon changes in GDP and comprises 18 major groups and about 300 companies. The results for the SIR Market Benchmark have differed widely from the popular averages and were extremely helpful to investors during the 2000 and 2001 stock market climate. A detailed report for the Benchmark is issued quarterly.
Note: We discontinued this series in late 2008 because we believed a “New Era” was underway and a new stock market and economic environment was developing.
Valuation and Corporate Profits
Also issued quarterly, this report has proven to contain meaningful investment insights for astute investors. Our proprietary earnings indices and valuation measures clearly illustrate the different trends within the stock market. These trends have become more pronounced over the years. Major insights from this study show that the price to earnings ratio for our Traditional Growth Average in 2000 never reached the peaks achieved in 1961, 1968, or 1972, and that the earnings index of our Capital Goods Average reached its high in 1995. This report also contains a discussion of economic profits which are computed by the U.S. Bureau of Economic Analysis. (Please note that we stopped issuing our Sector Averages because we believed that a “New Era” was in existence and new sectors would need to be developed when economic conditions stabilized.
Investment Strategy Report for Institutional Investors
This flagship report has been published regularly for 40 years. It recommends stock market sectors to pursue and avoid, and suggests the appropriate degree of equity exposure for large institutional portfolios. Its extensive graphic section shows pertinent economic, monetary, industry, interest rate, and stock market series. Each report contains different sets of indices that we believe will be the crucial variables for the securities markets as well as updated figures for our proprietary stock averages. Professional investors receive a thorough and perceptive examination of the economy, capital markets, politics, investor psychology, and technical and quantitative conditions.
Washington Perspective
Kenneth Safian has consulted with government officials in Washington for more than 30 years and from time to time offers insights, through Political Notes, on matters that have investment significance.
Special Reports
When investment conditions are unusual or controversial, SIR may send a timely report to clients that explores a political development, a specific economic or stock market indicator, an item of recent investor interest, or contains some other special insight that will set matters in clear perspective.
Our Website includes some selected articles and related series from earlier years.