Owner: MUTUALDecision Blog - Dedicated to Mutual Fund Information and Investors URL:http://blog.mutualdecision.com/xml/rss20/feed.xml Join Date: Thu, 31 May 2007 10:24:17 -0500 Rating:0 Site Description: The only blog dedicated to mutual fund investors. Tools for intelligent invesment decisions. MutualDecision is the only source you will need for all your mutual fund information, including the latest news tutorials and our own insights. Site statistics:Click here
A Euro, a Yen, a Buck or a Pound 2007-12-05 08:12:00 Or a Yuan. (My apologies to all you Cabaret fans.) As a mutual fund or ETF investor you need to be aware of the currency risks you’re taking when investing internationally. Is your fund hedged against the dollar or not? Do you want your fund to be hedged or not? What difference does it make to you? Let’s start with the last question first.
Currencies do fluctuate is value, except for the Yuan. Its exchange rate is fixed by the Chinese government, but even the Chinese are responding to pressure to let the Yuan float upward in value against the dollar. The dollar has declined against the major world currencies for the past seven years. Take the Euro, for example. The current exchange rate is about €1.00 = $1.46, a slight decline for the recent record of $1.49, but a big change from the one-to-one exchange ratio in 1999. Any dollar based investor, such as those of us in the good ol’ USA, would have se Read more:Pound
The Bobbing Cork 2007-12-03 07:16:00 The stock market rebounded this week like a cork popping up after a fish wiggles off the hook. The Dow opened the week below 13,000, declined to 12,725, then railed 647 points to close on Friday at 13,372. The S&P and NASDAQ turned in similar performances. From a 10% correction, fears of a meltdown in the financial sector and recession the preceding week, the market rallied for four consecutive days and closed at its high for the week. What caused this swing? Equity investments in Citicorp and e*Trade demonstrated that capital was available for the financial sector and the financial stocks rallied on the news. Treasury Secretary Paulson proposed a moratorium on rate adjustments for certain subprime mortgages and Fed spokespersons, including Chairman Bernanke, hinted at the possibility of another rate cut in December. And, overshadowed by all the good news in the financial sector, oil closed at $88.70 a barrel, below $90 for the first time in week
Investing is like Football: You get Penalized for Holding 2007-12-12 06:35:00 If you get caught holding in football your team loses yards. If you get caught holding in your portfolio you lose money. There is no such thing as a hold investment. Yes, I know, every day hold recommendations are issued by Wall Street analysts but they’re copouts. Every investment recommendation that is not a buy is a sell, regardless of what label’s put on it. There are only two investment decisions: buy and sell. If you own a stock, bond, mutual fund, ETF, house, or car and don’t sell it, you’re making a buy decision. Why? Because you’re continuing to hold the asset and subjecting yourself to all the risk that comes along with it.
The buy/sell decision doesn’t mean you have to keep buying more of an asset but it does mean if you think an asset is fully priced, you should sell it. It’s okay to hold an investment you’d otherwise buy if you’ve reached your maximum hold size given ris Read more:Investing
, Football
Cosmetic Surgery Is a Leading Economic Indicator 2007-12-10 08:49:00 A front page article in Saturday’s Wall Street Journal, Evidence Grows That Consumers are Pulling Back, discussed the slowdown in spending on cosmetic surgery as a harbinger of a recession. (I’d like to link to the article but The Wall Street Journal doesn’t allow it. Hopefully, Mr. Murdoch will change this now that he owns the paper.) It seems as if spending on such surgery had previously been recession-proof. Perhaps it fell under the heading of consumer necessities. Now cosmetic surgeons are feeling the economic pain. The article specifically mentions a drop off in corrective eye surgery and breast implants. There used to be a hemline indicator for the stock market. For every decade starting with 1900, the stock market rose and fell following the length of women’s skirts. It would be politically incorrect for me to suggest an implant indicator, so I won’t.
Are we heading for a recession, and Read more:Cosmetic
, Surgery
, Leading
, Economic
, Indicator
Seasons Greetings 2007-12-21 16:03:00 All of us at MUTUALdecision.com and the MUTUALdecision blog wish you and yours a safe and happy holiday season. Our next blog will appear on January 2. We wish you a prosperous New Year. Read more:Greetings
Investment Tax Strategies for the Holiday Season 2007-12-19 12:58:00 The countdown to the New Year has begun but before the ball drops, actually before 4 PM EST on that Monday, review your investments and place your sell orders for tax-driven transactions. For stocks and other securities, make sure your order is placed in time for it to be executed. This is particularly important for thinly traded stock and bonds. Taking a loss will offset gains and you can take an additional $3,000 of losses (on a joint return; $1,500 on a single return) in excess of capital gains as a deduction on your income tax returns. For the maximum advantage, try to offset short-term gains with short-term losses and long-term gains with long-term losses.
For mutual fund investors, even if you haven’t sold any funds this year, you still many have a taxable capital gain. Mutual funds must pass through their net capital gains or losses, and income, to their holders. Give your fund a call if you haven’t heard from it about its 200 Read more:Season
, Holiday
, Strategies
Vicious Circles 2007-12-17 14:10:00 For the week, the Dow was down 2.1%; the S&P and NASDAQ were off about 2.5%. The new news was inflation. The Producer Price Index increased by 3.2%, in November and 7.2% for past twelve months. The Consumer Price Index was up 4.2% for the same twelve month period. The primary culprit was energy. Gasoline prices increased 35% last month. The only reason the CPI wasn’t up as much as the PPI is that energy companies have been reluctant to pass along price increases for fear of government backlash. Energy prices have been rising, in part, due to a declining dollar. With a $60 billion monthly trade deficit, the world is awash in dollars. This puts further pressure on the dollar, driving up the cost of imports, particularly energy. This is a vicious circle.
The old news last week was the housing and financial issues. The financial crisis has tightened credit standards for all potential mortgagees. (These tough new lend Read more:Vicious
Coming Soon - The MUTUALdecision Newsletter! 2008-01-09 06:31:00 To provide our readers with even more informative content, we have created the MUTUALdecision Newsletter. The Newsletter will replace our Blog and will be emailed to you for FREE on a weekly basis starting in March 2008.
In our Newsletter we will continue to provide insightful commentary on mutual fund investing and market outlooks that you found in our Blog. In addition, we will feature our Top Mutual Funds sections based on data from the MUTUALdecision Academic Models and abstracts of leading academic research on fund investing.
Thank you for reading our Blog and we hope you continue to enjoy our articles and information in the MUTUALdecision Newsletter. Read more:Coming Soon
The Beginning of the End 2008-01-07 08:49:00 Another piece of the puzzle fell into place last week as the economy slides into a recession. The manufacturing index fell to 48%, anything below 50 signals an economic contraction. The December jobs report was mixed. 18,000 new jobs were created but the unemployment index rose to 5.0%. Don’t be surprised to see the January or February jobs report turn negative, at which time the last remaining significant economic indicator will have slipped into the red.
The likelihood of further declines in existing home values was reemphasized last week. Housing prices will have to fall 15% to return to their historical relationship with rents – the point at which renters will consider/be able to afford buying a house. Commercial real estate does not s
2008 Economic and Investment Outlook 2008-01-02 08:07:00 The economy faces serious challenges in 2008: 1. New home sales are at a 16 year low and may go lower; 2. Inflation will be high for the next few months as energy and food prices work their way through the economy; 3. Retail sales will be weak, as evidenced by the Christmas season; 4. Illiquidity in the credit markets will spread from mortgages to auto loans and credit cards due to financial companies tightening their lending standards; 5. Adjustable rate and subprime mortgage problems will continue; 6. Corporate profits will turn negative. These factors will contribute to, but not cause, the 2008 recession and they will be somewhat mitigated by strong export demand (thanks to the weak dollar) and, at least for the time being, good unemployment number Read more:Economic
, Outlook
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