Nastiest bear since great depression
March 22, 2009
Compare to the most severe markets in the past, the current bear market look extremely cruel and only can be rivaled by the Great Depression bear maket.
First After 17 months of rollercoaster journey, the current bear market is getting worse as the S&P 500 index suffered 56 percent loss from its most recent peak when it plunged to the 12-year low on Mar. 9. On the same day, the blue chips Dow Jones Industrial Average index slipped to its new low marking 53.8 percent loss in this bear market. Continue reading
Every bear has a bull
March 15, 2009
The current seventeen months
bear still rules the market and has hurt investors badly. Just recently on Mar. 9 the S&P 500 index was at 676.53, its 12-year low, after losing than 56 percent from its all time peak on Oct. 9, 2007. Many severely wounded investors have fled the stock market and abandoned their long-term investing strategy.
Over past four trading days, the S&P 500 rallied 11 percent, closing the week at 756.55 on Mar. 13, recovering from the 12-year low reached Mar. 9.
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One year after the bear
March 14, 2009
History suggests that every bear has a bull. The illustration charts below reveal that in all but one case of the nine bear markets that occurred between 1950 and 2003, the market recovered dramatically within one year of hitting bottom. Investors who were patient during periods of stress and dislocation were eventually rewarded for taking risk over the bear markets. Continue reading
February 8, 2009
Fund managers are judged on whether their return beat benchmarks, which are the industry or the stock market average returns. But beating the average was not enough; it was possible to outperform in the short term, simply by taking a lot of risk.
Every investor knows that high volatility associated with an investment is a bad thing. The more an investment’s returns fluctuate from month to month, the greater its volatility, the riskier the security is. Big fluctuations also suggest fear, because they mean that investors are frantically changing their minds about what stocks are worth in the face of great uncertainty. On this ground, the
CBOE volatility index, also known as VIX, is often referred to as the "fear index”.
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Argument for Asset Allocation
February 1, 2009
Stocks, bonds, and real estate are all getting beaten in this bear market and economic recession. Even commodities, which often don’t move in tandem with equities, are plummeting along with stocks.