Marketing Commentary- Q4 2003
What’s Been Happening? The stock markets of the world soared upward in the last quarter of 2003, in joyous defiance of common expectations. Concerns over the U.S. occupation of Iraq, lack of job creation during the economic recovery and other worries couldn’t constrain financial markets bent on running for daylight. It bears repeating that the extraordinary returns of 2003 were largely unexpected. When short-term returns are so often surprising, it is relevant to ask, “When will we admit we cannot predict and cease to be surprised?” Trends to be Aware of The biggest worldwide economic story...
Read MoreMarketing Commentary- Q3 2003
What’s Been Happening? It is well documented that most investors, including most professional money managers, don’t beat “the market” over time. This is one of those rare times when, looking back, it appears the professionals are beating both the dartboard and the unmanaged indexes. But a closer look tells a different story, at least with mutual funds. Over the five years ending 8/31/2003, fewer than half of actively managed mutual funds managed to beat the indexes to which they should be compared. Categorizing mutual funds by the size of the company they invest in (Large, Medium and Small)...
Read MoreMarketing Commentary- Q2 2003
What’s Been Happening? Springing off of the doom and gloom of an unpopular war that ended sooner than expected, the stock markets of the world soared without pause in the past three months. Once again, financial markets “surprised” the forecasters, this time to the upside for a change. International markets made some of the biggest gains along with small company stocks as the riskier asset classes provided the highest returns. Bonds gained only modestly for the quarter and actually declined in June as interest rates moved up slightly. Trends to be Aware of The stock market recovery has been...
Read MoreMarketing Commentary- Q1 2003
What’s Been Happening? In times of modern warfare and like events that demand compelling and protracted media coverage, the economy slows down due to something known as the CNN effect. Viewers stayed glued to their T.V. sets instead of shopping; advertising revenues drop due to more uninterrupted coverage; and the combined effect is less overall spending and economic activity. The controversial war in Iraq, our first major US conflict since the internet was widely available, takes consumer sentiment and fears up and down in manic swings, and the financial markets are running on the same...
Read MoreMarketing Commentary- Q4 2002
The stock market returned to a more normal pattern this past quarter with two steps up (October and November) and one step down (December), for a net positive gain. Bonds continued to ride the ethers of unsustainably low interest rates and the high velocity euphoria of billions of dollars liberated by home re-financings. In all, it was only a moderating finish to a murderous year. Trends to be Aware of Last quarter, we wrote that investors were too bearish and that correctly presaged a quick bounce upward in the stock market. But rare bouts of optimism are tethered and...
Read MoreMarketing Commentary- Q3 2002
A (final?) surge in bond prices accompanied a record drop in the broader stock market over the past three months. Most major stock indices now show negative returns over the past five years. These returns (see below) are extremely beneath long-term trends, setting up another regression to the mean (this time to the upside). Sentiment has collapsed with concern over the war in Iraq adding one more element to the Bear Market Perfect Storm string of events that have market the past two and a half years. Trends to be Aware of For the first time ever, a bond fund (Pimco Total Return) is the...
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