What The Market Ralley Means
by Richard Schroeder
The U.S. stock market has rallied almost 24 percent since it reached new recession lows on March 9. What does this mean and what lessons can we draw from this swift and unexpected rally?
The biggest lesson is that the markets cannot be predicted. Things looked very bad on March 9; I don't know of anyone, amateur or professional, who expected a 300-point Dow Jones Industrial Average rally the next day, or a climb of over 1,400 points over the next four weeks.
In fact, I had lunch with five veteran investment advisors here in Western New York on March 10 as the rally was beginning.
. . . -READ More-
So, Have We Hit Bottom?
by Guy Baker
So have we hit the bottom? Is Obama a genius and have things turned. With a great March and the Dow Jones Industrial Average up about 10%, the ides of March have certainly changed the direction of the winter storms. But are the sentiment from February real? With resistance levels being broken and economic data coming in better than expected, are the good times here?
Oh that it would be true. But we are standing in a big hole, a debt crisis of tsunami proportions and it is not appropriate to declare the crisis over and things are going back to normal, at least not yet. Please don’t think me bearish, I'm just trying to be pragmatic. . . -READ More-
Is it a ‘lost decade’ or a rosy future for stock investors?
The market bears are bemoaning the “lost decade” that equity market investors have suffered since 1999. A 10-year period of no returns negates the argument that stocks are the best investment for the long term, they say.
The argument may not hold water, however: expand your investment horizon out just a few years more and “lost decades” turn into positive returns on stocks. . . -READ MORE-
Inflation, not volatility, is the big risk
Many investors have worried about principal loss recently as the stock market turned sharply lower.
They may be emphasizing the wrong danger: While the risk of loss in stocks declines the longer you own them, the risk of loss of purchasing power due to inflation is a given that only keeps growing steadily throughout an investor’s lifetime. . . . -READ More-
Employer pension funds beat mutual funds by a wide margin
Employees who are still covered by traditional pension plans have something to cheer about: their pension fund investments are probably doing better than their individual mutual funds.
A new study by a Dutch finance professor shows that pension funds outperform actively-managed mutual funds by as much as 2 percentage points per year. . . -READ More-
Global stocks, risk tolerance, & more
Global stock market rankings from late 2008 show that the U.S. stock market is still roughly five times bigger than its nearest competitor, Japan, says Bloomberg news service. 
The United Kingdom and China followed right behind Japan, all with between $3 trillion to $4 trillion in assets.
Rounding out the top ten were France, Hong Kong, Germany, Canada, Brazil, and Australia. . . .-READ MORE-
Marketing may lead investors to make bad mutual fund choices
If an investor was able to predict which mutual fund within a similar class of funds would perform the best, wouldn’t it be more likely he would invest in that fund?
Not so, found a study of Standard & Poor’s 500 Index funds done by professors at New York University and Emory University.
It should be easy to distinguish the potential winners in the S&P 500 index funds category since they all invest in the same stocks held in the index. . . . -READ MORE-