January 2011 saw the first decline for the Hedges Aftermarket Stock Index since July 2010. The 5% decline in stock value was halted in February and the Index rebounded 4% through April. In comparison, the S&P 500 increased 2% in January, 2% in February, and 3% in April. The S&P increase may be attributed to an uptick in the Consumer Confidence Index that is approaching a 9 month high. However, a combination of a strong new car market and increased oil prices may negatively affect the aftermarket in months to come.

Automakers are expecting to reach sales figures of nearly 12.6 million units per year (December 9 update: units will be close to 14 million for 2011) which is up from the 10.5 million in the previous year.

Although the Hedges Aftermarket Stock Index declined, the “What If You Invested $1,000 in Automotive Aftermarket Companies” topic is still exciting! If you would have invested $1,000 in the automotive aftermarket on January 1, 2008 your investment would be worth $1,585.30 (excluding dividends). On the other hand, $1,000 invested in the S&P 500 would now be worth $968.60 (excluding dividends).

February and March historically have seen declines or flat results that rebound when warmer weather starts to hit the entire country.

Financial disclaimer: Hedges & Company is not attempting to give any financial advice; investments are subject to risk; carefully review and consider a prospectus before making any investment decisions. Full disclosure: Hedges & Company principals do not directly own stock in any of the companies listed.