Video: Caveat Investor & the Global Investment Firm

I've always been amazed how the larger investment firms get away with blatantly anti-consumer behavior. Obviously they have deep pockets to lobby Congress in addition to advertising heavily during Sunday's televised golf match. I know some very good investment brokers, but I have no idea why they choose to stay in that culture. This video has a funny spin on highlighting the differences between fiduciary advice and advice that is not necessarily in the client's best interest but deemed 'suitable.' It's worth a 5-minute break in your day.

Last Week Was Not One To Miss

Last week the Dow rose 7.3% last week amid earnings reports from many companies, as reported in the Wall Street Journal ( http://online.wsj.com/article/SB124782681174757379.html ). For most companies, it's not like the reports were necessarily good. It was that the news was not as bad as expected . This rapid rise in the market occurred despite poor economic news, including rising unemployment now predicted to go north of 10%. To many investors, this seems counter-intuitive: poor economic news and declining earnings reports compared to the same time last year yet the market goes up markedly. How come? It's quite simple actually. The market looks forward and reacts to new and unknowable information . So even though the news was bad, much of it was not as bad as expected . Thus the new information positively changed market expectations and prices adjusted upward. Unless you can predict the future, as investors we must stay invested through good times and bad to ensure we experien...

Are We All Socialists Now: Government Intervention and Stock Market Returns

As a recent Newsweek cover asked, "Are We All Socialists Now?" And if so, should U.S. equity investors be alarmed by the prospect of greater government intervention in the economy? Historical data looking at this very question may be surprising to you. Click the link below to watch a short 6 minute video, which provides some objective comparisons of stock market returns from the more free-market system in the U.S. compared to the returns from more interventionist governments from around the world. The evidence suggests that government intervention is just one factor among many affecting stock returns, and that an above-average degree of intervention is not necessarily associated with below-average returns. https://admin.acrobat.com/_a772887163/governmentinterventionandstockreturns/ To Your Prosperity ~ Kevin Kroskey

Bond Investors Misled by Wall Street Journal Article

In an article published today in the Wall Street Journal, entitled "The New Bond Equation," the author attempts to educate readers about the potential risks involved in investing in bond mutual funds, given the current economic environment. He writes: "As the financial crisis heads into its third year, investors in bond funds are facing some difficult choices. Investors usually turn to these funds for safety. But bond funds are facing a host of pressures that are driving down returns, raising long-term risk—and making it tougher to settle on the right investment strategy." While I agree with the author's statement above, he makes some statements that mislead bond investors. ( Click here to read the full article. ) For example, he writes: "....they’re buying vehicles that invest in intermediate-maturity bonds. These funds also typically hold a mix of government, mortgage and investment-grade corporate bonds, which spreads risk around. Even cautious intermedi...

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