February 2009 Newsletter
Stimulus? Hope Springs Eternal
by Guy Baker
Even though the economic data released last week was terrible (high unemployment, drop in personal income, shrinking factory orders, etc.) the stock markets had one of their best weeks in a long time. Uh?
Probably anticipating the stimulus bill and the free flow of goodies the economy will reap.
Whether the package will do much good, and how long it will take to infiltrate the economy is definitely open to question. But hope springs eternal. . . -READ More-
Why intelligent people fell for Bernie Madoff’s Ponzi scheme
T he Ponzi scheme run by Bernard Madoff may have cost his investors some $50 billion. For many, the big question is how could seemingly sophisticated investors be so stupid? Even more important, what lessons can we learn from their mistakes so that we can avoid the next con artist who comes along?
Interviews with victims show that class status, exclusivity, reputation, blind trust, an unrealistic expectation for “safety,” and the old X Files “I want to believe” phenomenon contributed to their downfall.
. . . -READ MORE-DFA Market Review and
New Fama/French Forum
 Market Review |
Dimensional has created the Fama/French Forum a venue for financial economists Eugene Fama and Kenneth French to share their ideas and perspectives. . . . -READ More-
More Proof Market Timing Doesn’t Work
Investors have proven once again that market timing doesn't work and that the stock market is impossible to predict.
The first week of December was a wild ride for the Dow Jones Industrial Average. The Dow dropped 680 points on Monday, Dec. 1, then gained 270 points Tuesday and 172 points Wednesday, then dropped 215 points on Thursday before rising 259 points on Friday. . . -READ More-
Tough times may be here, but you can still improve your finances
The year 2009 is already proving to be financially tough, but the regulatory agency that oversees stockbrokers and the markets has some tips to help you weather the storm.
The Financial Industry Regulatory Authority (FINRA) suggests your top priority should be paying down credit card debt. “Banks are increasing interest rates and late fees and reducing credit limits on credit cards,” it says. Paying down debt will save you interest and improve your credit score. . . .-READ MORE-
If the experts cannot predict the markets, you can’t either
Were you able to predict the global bear market that sucked trillions of dollars out of investors’ pockets in late 2008?
In retrospect, it looks like it should have been easy to predict—after all, the subprime mortgage crisis had gone on for a year before stocks started crashing in October 2008. It seems obvious that the economy was collapsing and that stocks were going to head down sharply. . . -READ MORE-