A Week In India: WOW!!!
--- by Guy Baker
I just returned from a week in India – Mumbai, Goa and Hyderabad. WOW!!! There was so much going on there. I was asked repeatedly about the US economy and what was going on. Their eyes seemed to be on the US and what it would mean to them. But clearly India and China have the world stage right now. Rupees any one? They are only 2 cents a piece.
. . . -READ More-
Did The 2008 Bear Market Put An End To Diversified Portfolios?
The bear market of 2008 has raised some serious questions: Do stocks really outperform bonds in the long-term? Is asset allocation dead?
The Standard & Poor’s 500 Index fell 37 percent in 2008, and other groups of stocks, especially foreign stocks, fell even more.
The 2008 bear market came just five years after the end of another bear market early in the decade. The two events pushed stock market returns well below average. The S&P 500 Stocks index, for instance, lost an average of 0.2 percent per year over the past 10 years.
Meanwhile, long-term government bonds gained 8.0 percent per year in the same period, well over their historic average of 5.5 percent per year going back to 1926.
Bonds even beat stocks over the last 20 years, gaining 8.8 percent per year, while stocks gained 8.0 percent per year.
Stock Market Tips From 1926 Still Stand
The lessons of Wall Street rarely change. The things that do change are the memories of investors, which are notoriously short-term and seem to easily discard sound advice when a market mania takes hold.
Investors trying to make their way through the stock market’s thickets today could find much of what they need to know from “How to Make Money in Wall Street” by George Frederick, a 50-page pamphlet published by Little Blue Books in 1926. . . -READ MORE-
Falling Prices And Low Rates Do Not Signal Inflation Resurgence
One of the two prevailing public fears about the economy’s near term centers on inflation.
Commentators on television, the Internet, and in print warn that inflation is due for a big jump due to the massive government spending done to rescue failing financial institutions and to jump start the economy . . .-READ More-
Sin Stocks, Loyal 401k Savers, & More
“Sin” stocks that represent tobacco, alcohol, and gaming companies offer market-beating returns, a new study concludes.
Marcin Kacperczyk of New York University and Harrison Hong of Princeton say sin stocks outperformed by 2.5 percentage points annually from 1926 through 2006.
The Best Time To Invest Comes After Big Economic Recessions
The easy money in the stock market comes in the first two to three years after a recession ends.
During the 10 recessions preceding the one that began in December 2007, the U.S. stock market on average was up 33 percent a year after the economy bottomed. Within three years the market was up an average of 59 percent.
. .-READ MORE-