Insightful Investing Update February 2009
2009 started out with the worst January ever for the stock market, at least that’s what you can read on every other investment web site, so maybe it would be better if we changed the subject. Remember, we are not playing Texas Hold’em here, this is your investment portfolio we are talking about. As we said last month, there is no reason to go “All In” right now. If you took a lot of your money off the table in the last year, you should start to slowly get back into the market. On the other hand, if you rode out the storm by being fully invested it is time to get your portfolio ready for the coming recovery, even it if may be 2010 before that gets started. Either way, our portfolio allocations are a target for you to aim for during the quarter by slowly moving in that direction.
For the sake of just covering the bases, a few comments about the financial markets are warranted. Just when you might have thought it was time to get back in Real Estate, these funds gave back all of their December gains in January. While I was on target by saying that Long Government bonds had moved up too far and too fast, I did not anticipate a drop of almost 10% in January. Seems like the flight to quality bubble has burst for the time being. International funds had a worse month than US stocks, thanks to the strength of the dollar. Value stocks were hurt more than growth stocks, which may be a sign that the market is anticipating a recovery. The big winners for the month were High Yield Bond Funds, bouncing back from a difficult year with a gain of 4.6%.
Keep in mind, that those investments that fell the worst are likely to bounce back the most in the next year or two.
|
