December 2007 Newsletter
End of the Year Commentary
by Guy Baker
The Holidays are a time for acknowledging our blessings and giving to those we love.
But the markets weren't in much of a giving mood through Thanksgiving, taking back even more of this year's gains.
Then the market bounced.
The Dow [down -1.49%; +4.15% YTD through Thanksgiving and then up +2.38, +6.53% YTD], the S&P 500 [-1.24%; +1.58% then bounced +1.27% and +3.74% YTD], and the NASDAQ Composite [-1.54%; +7.51% then bounced to +2.47% and +9.98%YTD] all were up for the week following Thanksgiving and still clinging to positive returns for the year overall. . . .
How to keep yourself on track when markets are out of kilter
How should a successful investor handle stressful markets?
More precisely, how should an investor handle his own feelings when markets are rocky?
It is obvious to most investors that they can’t control the investment markets; they can only control their own reactions.
If they let their negative emotions get the better of them they will not only feel bad, but . . .
OPTIMISM IMPROVES YOUR FINANCIAL HEALTH
A novel study of optimistic feeling suggests that moderate optimism is key to making reasonable financial decisions.
However, too much optimism leads to imprudence, said the study by Duke University professors David T. Robinson and Manju Puri.
“This paper suggests that optimism is a bit like red wine: too much is clearly bad, but a little each day can be good for one’s health,” they wrote.
The researchers used an unlikely source . . .
ARE MONEY MARKET MUTUAL FUNDS HEADED FOR TROUBLE
Jitters in the credit markets due to fallout from the sub-prime mortgage mess have spread to that bastion of perceived safety, the money market mutual fund industry.
Should investors be concerned?
. . .
ROLE MODEL MOMS, COUPLES ARGUE, & MORE
Mothers are a bigger financial influence on children than are fathers, found a recent survey by Ameriprise Financial.
Fifty percent of adults (split evenly between men and women) named their mothers as the most influential in teaching money management. Fathers were chosen by 38%.
Seventy percent said their mothers were good financial role models, although it was a tossup . . .
COLLEGE-BOUND STUDENTS FACE SIGNIFICANTLY HIGHER COSTS
Families planning to send children to college got another bad dose of financial news recently when the College Board announced that costs continue to rise rapidly.
The non-profit group said tuition and fees at both private and public universities rose by more than twice the rate of inflation this year.
The average cost of tuition and fees at private schools increased by . . .