Insightful Investing Update December 2008
About the best thing we can say about November is that it did not turn out as bad as October, but it certainly gave it the old college try before bouncing back for a loss of ‘only’ 7% for Large Cap Stocks, and 12% for Small Caps Stocks. This was the worst one - two punch since the same two months in 1987. The powers that be have now declared that the country has been in a recession for the last year, something that those of us living in the real world figured out a long time ago.
Real Estate got hammered them most, falling more than 20% in just a month (which means it must have been down at least 30% at some point in November. Bonds provided the only real safe haven this month, another reminder that Long Term Bonds are inversely correlated with stocks. The were up so much, you might even say we could have a bubble there. With all the trouble we are having in this economy, is more likely to spring a slow leak than to burst.
With the selling pressure subsiding slightly going into the end of the year, you might consider getting your feet wet with some Large Cap Value funds, but there is no need to hurry if you have a long term horizon. We will have more to say going into the new year, as we make a few changes to how we present our insights.
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