Region’s stocks grow 6% from Q1
Local analyst says third-quarter slump follows long tradition of ‘miserable’ Octobers.
Despite losses last month, West Michigan’s public companies have seen stock market returns of 6 percent in the first three quarters of 2018.
Gregg Dimkoff, professor of finance at Grand Valley State University’s Seidman College of Business, calculated the West Michigan stock index using weighted averages of share returns from the region’s 16 publicly traded companies from Q1-Q3.
Kalamazoo-based medical device maker Stryker almost always tops the index, not necessarily because of its rate of gains per quarter, but because of its market capitalization, 374 million shares outstanding and high price per share, Dimkoff said.
“Stryker has had a really good nine months,” he said. “The index itself is … heavily influenced by Stryker.”
Dimkoff said the market “started going to pieces” last month, but investors should resist the urge to sell off following the Dow Jones and S&P 500 losses that erased all gains made in 2018 as of Oct. 24.
“Things have looked pretty miserable in October. Historically, in the U.S., October is a bad month. The crash of 1929 started in October. Other crashes have happened in October, too, for no dang reason,” Dimkoff said.
“People on Wall Street are superstitious, and October puts them on the edge of their nerves, which makes it worse. You have to take October with a grain of salt. November and December are two good months to watch.”
In response to speculations West Michigan’s economy is headed for a recession in the next 18 months, Dimkoff said it’s impossible to know.
He noted Alan Greenspan — former chairman of The Federal Reserve — a decade ago stood on the Wall Street trading floor and told everyone The Fed saw no roadblocks to the economy’s continued expansion.
Thirty days later, the housing market bubble burst and the Great Recession began.
“Humans don’t know these things,” Dimkoff said. “We’re trying to predict something that’s unpredictable. Some economists say it’s time for a recession. I think that’s crazy. It’s not like it’s time for the sun to set.”
Dimkoff said it’s counterproductive to pull out of the market when there’s a slump.
“It’s been proven again and again in finance that the people who ride it out and stay in the market and ride it back up end up with the most money in the long run,” he said. “People who sell turn a paper loss into a real loss. They don’t know when to get back in until it’s obvious the market is rising, and it goes up so quickly it’s hard to tell when to jump in.
“In terms of investors, in the long run, just keep investing.”
West Michigan stock performance Q1-Q3
Gentex, Zeeland: Stock price was $20.93 at the beginning of Q1, $21.46 at end of Q3, a 2.5% gain
Herman Miller, Zeeland: Started at $40.05, ended Q3 at $38.40, a loss of 4.1%
Independent Bank, Grand Rapids: Started at $21.33, ended Q3 at $24.15, a 5.8% gain
Kellogg, Battle Creek: Started at $67.97, ended Q3 at $70.02, a 3% gain
Macatawa Bank, Holland: Started at $10, ended Q3 at $11.71, a 17.1% gain
Mercantile Bank, Grand Rapids: Started at $35.37, ended Q3 at $33.37, a 5.7% loss
Meritage Hospitality Group, Grand Rapids: Started at $20, ended Q3 at $18.15, a 9.3% loss
Perrigo, Dublin, with North American headquarters in Allegan: Started at $87.16, ended Q3 at $70.80, an 18.8% loss
SpartanNash, Byron Center: Started at $26.68, ended Q3 at $20.06, a 24.8% loss
Steelcase, Grand Rapids: Started at $15.20, ended Q3 at $18.50, a 21.7% gain
Stryker, Kalamazoo: Started at $154.84, ended Q3 at $177.68, a 14.8% increase
Universal Forest Products, Grand Rapids: Started at $37.62, ended Q3 at $35.33, a 6.1% loss
Whirlpool, Benton Harbor: Started at $167.99, ended Q3 at $118.75, a 29.3% loss
Wolverine Worldwide, Rockford: Started at $31.88, ended at $39.05, a 22.5% gain
ChoiceOne Bank, Sparta: Started at $23.80, ended Q3 at $27.15, a 14.1% gain
Community Shores Bank, Muskegon: Started at $3, ended at $2.81, a 6.3% loss
West Michigan Index: 6 percent return through Q3