The market bottom is in place

Well, it is quite apparent now that the August lows in the market marked a great buying opportunity. This is usually the case, when fear is rampant and no one wants to step up to the plate to buy. Kudos to those who did put money in the market at that time. September, usually a bleak month for the market, proved to be one of the best Septembers on record. The S&P gained 4.3%, the Nasdaq +5.4% and the DOW was up 4.6%. The "Growth" strategy continues to outperform it's "value" and "blend" brethren for the first time probably this decade. Remember, value tends to outperform growth over long periods but in short time frames, growth can really skyrocket (think 1999, 2000). The Fed's action of unanimously cutting the fed funds rate injected the market with an incredible sense of relief that the worst is behind us. This doesn't mean the housing market has bottomed--I don't think it has. The Fed's action gave investors a reason to once again embrace risk as they put liquidity back into the market. And so, it's back to the races. Seasonally, the October through January time frame is typically the best time to be invested. I don't think this year will be any different.



For all you soon to be retirees, Vanguard has filed with the SEC to market three new funds that have managed payout options of 3, 5 and 7% annually. I think these funds will be very popular because it will make the process of drawing down assets straight forward. I will write about it as I get more information. This is really the first investment product that offers annuity like features without the drawbacks of annuities (high costs and irrevocable).