I really enjoyed this article in the May 2009 issue of Smart Money. It really puts things in perspective for me and definitely gives new meaning to the phrase, "Long term investor"!
http://www.smartmoney.com/investing/stocks/Meet-3-Stock-Pros-Who-Survived-the-Depression/?hpadref=1
Tuesday, April 28, 2009
Tuesday, April 14, 2009
First Quarter 2009 update
Thanks to the March mid month rally, or the first quarter of 2009 could have been much worse. Here are some market statistics:
The Growth style of investing continues to outpace the value style, which is a little odd for a bear market but has very much to do with technology companies doing very well with NASDAQ only down 3.1% for the year.
There are so many different opinions out there, even from the so called experts, of what investors should be doing. Here is a link to a great article in the Washington Post a few weeks ago that summarizes three of the world's greatest investing pros' current ideas. http://www.washingtonpost.com/wp-dyn/content/article/2009/03/14/AR2009031400057.html?referrer=emailarticle
I can give you an idea of what other people are doing: some, only a handful, have thrown in the towel on the stock market. I suspect these investors may never invest in the market again . A viable alternative exists, as many recent research reports have confirmed, bonds have beaten stocks for the past 10, 20 maybe 30 or 40 years--so an all bond portfolio isn't the silliest thing one could invest in. Especially now that interest rate differentials on corporate, high yield and municipal bonds are so large compared to the past 15 years, bonds look very attractive. A hefty percentage of investors continue to wait patiently for a market rebound, maintaining diversified portfolios with plenty of cash to meet liquidity needs. And lastly, a small handful have decided today's market offers ample opportunity to increase investment and have methodically been adding with every market decline, believing that one day, markets will rise again.
One thing that everyone is doing is really taking a close look at spending and finding ways to cut back. The key to starting is to know where all your money is going. Maintaining a spreadsheet or using something like Quicken or Microsoft money is the first hurdle. Once you know what your money is being spent on, you can begin to set limits. This is one way I, as a financial planner, can be very helpful because I analyze a lot of budgets and so I know what people spend on various things, on average. This isn't about living a life of deprivation but rather making reasonable choices about how you want to spend your money and taking control over spending.
The Monthly Index Report for April 2009
| Index | Mar-09 | QTD | YTD | Description |
| S&P 500 Index* | 8.5% | -11.7% | -11.7% | Large-cap stocks |
| DJIA* | 7.7% | -13.3% | -13.3% | Large-cap stocks |
| Nasdaq Comp.* | 10.9% | -3.1% | -3.1% | Large-cap tech stocks |
| Russell 1000 Growth | 8.9% | -4.1% | -4.1% | Large-cap growth stocks |
| Russell 1000 Value | 8.6% | -16.8% | -16.8% | Large-cap value stocks |
| Russell 2000 Growth | 9.0% | -9.7% | -9.7% | Small-cap growth stocks |
| Russell 2000 Value | 8.9% | -19.6% | -19.6% | Small-cap value stocks |
| EAFE | 6.4% | -13.9% | -13.9% | Europe, Australasia & Far East Index |
| Lehman Aggregate | 1.4% | 0.1% | 0.1% | U.S. Government Bonds |
| Lehman High Yield | 3.2% | 6.0% | 6.0% | High Yield Corporate Bonds |
| Calyon Financial Barclay Index** | -2.5% | -2.2% | -2.2% | Managed Futures |
| 3-mo. Treasury Bill*** | 0.0% | 0.1% | 0.1% |
The Growth style of investing continues to outpace the value style, which is a little odd for a bear market but has very much to do with technology companies doing very well with NASDAQ only down 3.1% for the year.
There are so many different opinions out there, even from the so called experts, of what investors should be doing. Here is a link to a great article in the Washington Post a few weeks ago that summarizes three of the world's greatest investing pros' current ideas. http://www.washingtonpost.com/wp-dyn/content/article/2009/03/14/AR2009031400057.html?referrer=emailarticle
I can give you an idea of what other people are doing: some, only a handful, have thrown in the towel on the stock market. I suspect these investors may never invest in the market again . A viable alternative exists, as many recent research reports have confirmed, bonds have beaten stocks for the past 10, 20 maybe 30 or 40 years--so an all bond portfolio isn't the silliest thing one could invest in. Especially now that interest rate differentials on corporate, high yield and municipal bonds are so large compared to the past 15 years, bonds look very attractive. A hefty percentage of investors continue to wait patiently for a market rebound, maintaining diversified portfolios with plenty of cash to meet liquidity needs. And lastly, a small handful have decided today's market offers ample opportunity to increase investment and have methodically been adding with every market decline, believing that one day, markets will rise again.
One thing that everyone is doing is really taking a close look at spending and finding ways to cut back. The key to starting is to know where all your money is going. Maintaining a spreadsheet or using something like Quicken or Microsoft money is the first hurdle. Once you know what your money is being spent on, you can begin to set limits. This is one way I, as a financial planner, can be very helpful because I analyze a lot of budgets and so I know what people spend on various things, on average. This isn't about living a life of deprivation but rather making reasonable choices about how you want to spend your money and taking control over spending.
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