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If you were to play a word association game using stocks as the words, a lot of people would probably associate General Electric Co. with "bellwether."

GE is one of the largest companies in the world, based on the value of its shares, with major interests in the sort of businesses that make the global economy tick: plane engines, power generation and household appliances.

Where GE goes, surely the rest of the world will follow. That's the hallmark of a bellwether stock and gives investors a type of leading economic indicator with which to size up the health of the global economy.

There are some serious problems with bellwethers, though. For one, there are a lot of them – and their ranks seem to be growing. Intel Corp., Microsoft Corp., Wal-Mart Stores Inc., AT&T Inc. and McDonald's Corp. are often mentioned as bellwethers. Combined with GE, that's 20 per cent of the Dow Jones industrial average right there.

The list gets even bigger if you start asking difficult questions – like whether bellwethers are supposed to reflect the entire global economy or one aspect of it or the fortunes of a particular sector or the health of the domestic economy.

Answer yes, yes, yes and yes, and you could point to just about any blue-chip stock as a bellwether, which seems to dilute their significance. After Facebook Inc. completes its initial public offering later this year, surely it will be seen as a bellwether for the entire social media industry.

But strip away these complications and accept that bellwethers are real, you're still left with one more difficult question: What do you do with them?

In the past, investors haven't done a whole lot, given that the share prices of bellwether stocks have a mixed record for forecasting turns in the market.

In the case of GE, its share price has tracked the broader S&P 500 fairly closely in recent years. That is, GE's share price hit a near-term high on October 5, 2007, just one week before the S&P 500 hit its peak. During the devastating bear market that followed soon after, GE bottomed out in 2009 just two trading days before the S&P 500 bottomed out.

As signals go, these aren't exactly flashing lights, warning investors to get out of the market or into it.

Then again, maybe investors just don't heed warnings from bellwethers the way they should. FedEx Corp., another popular bellwether stock, raised some eyebrows last week when the global shipper provided a dimmer view of the economy this year, conflicting with some of the more hopeful views reflected in the stock market.

"We just don't have a strong economy as we had hoped it would be a year ago," said FedEx's chief financial officer Alan Graf, on an earnings call.

Aha! Here we have a bellwether pointing to potential trouble ahead. And what was the reaction? Since then, FedEx shares have barely budged while the S&P 500 has risen slightly, suggesting that investors don't really care.