How Ordinary Investors Can Make Sense of a Crazy Stock Market

Over the long run, a healthy economy leads to strong stock market performance. But lately, it seems that when good economic news comes out, the stock market is more likely to fall rather than rise. What's behind this upside-down perception in the markets?

In the following video, Fool markets analyst Mike Klesta talks with Fool contributor Dan Caplinger about how to avoid the confusion that today's markets have created among investors. When you look at the overall market, macroeconomic factors play an important role, and so it's essential to pay attention to external factors such as the Federal Reserve in forming your investment strategy. But for individual stocks, fundamentals are what matters. Dan explores several examples to keep your investing focused on what matters.

One company that has suffered from the poor global economy is Caterpillar, but as the market share leader in an industry in which size matters, and its quality products, extensive service network, and unparalleled brand strength combine to give it solid competitive advantages. Read all about Caterpillar's strengths and weaknesses in The Motley Fool's brand new report. Just click here to access it now.

The article How Ordinary Investors Can Make Sense of a Crazy Stock Market originally appeared on

Fool contributor Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.