Homo Economicus: An Endangered Species

After being through a period of pessimism, the financial world started 2010 in such an optimism that it is hard to explain. What happened to all those catastrophic predictions when the crisis started in 2008? Do those who defended market reasonability have any convincing explanation for such slump in 2008 and the spectacular recovery later on?

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Mutual Fund Managers Follow S&P

A recent BusinessWeek article pointed that six of the ten largest U.S. stock funds have reported correlations of 0.99 with the S&P 500, meaning their moves almost exactly mirror the S&P 500. One investment manager stated that investors have a "risk-on/risk-off" attitude that leads at times to violent swings. The high correlation is making it difficult for actively managed funds to produce better returns than the lower-cost index funds.

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Contrarians Suggest Investor Pessimism as a Rally Sign

Americans continue to be wary of stocks. The S&P 500 stock index is almost unchanged from a year ago, and mutual fund investors have pulled $57 billion from equities since May. At the same time, when stocks appear as the better investment investors have put about $597 billion into bond funds, according to ICI. In fact, 68 stocks in the S&P 500 paid dividends that exceeded the average corporate bond rate. Confidence in bonds is misplaced, according to a manager at Pioneer Investments. Credit Suisse pointed out that free cash flow (outside of the financial industry) represented 6.8% of stock prices, which is the highest level since 1960. Some suggest that retail investors need to see tangible evidence that will generate sustained growth.

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PR Newswire – Innovative Online Stock Analysis Tool Updated
At a crucial time for Americans to build and preserve wealth, BetterInvesting, a long-established nonprofit investment education organization, is leading the way with innovative, online solutions to empower investors to take control of their financial futures. The organization recently released an enhanced version of its easy-to-use, unique Web-based program empowering users to easily and conveniently analyze stocks.

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Homo Economicus: An Endangered Species

After being through a period of pessimism, the financial world started 2010 in such an optimism that it is hard to explain. What happened to all those catastrophic predictions when the crisis started in 2008? Do those who defended market reasonability have any convincing explanation for such slump in 2008 and the spectacular recovery later on?

-- Delivered by Feed43 service

Mutual Fund Managers Follow S&P

A recent BusinessWeek article pointed that six of the ten largest U.S. stock funds have reported correlations of 0.99 with the S&P 500, meaning their moves almost exactly mirror the S&P 500. One investment manager stated that investors have a "risk-on/risk-off" attitude that leads at times to violent swings. The high correlation is making it difficult for actively managed funds to produce better returns than the lower-cost index funds.

-- Delivered by Feed43 service

Contrarians Suggest Investor Pessimism as a Rally Sign

Americans continue to be wary of stocks. The S&P 500 stock index is almost unchanged from a year ago, and mutual fund investors have pulled $57 billion from equities since May. At the same time, when stocks appear as the better investment investors have put about $597 billion into bond funds, according to ICI. In fact, 68 stocks in the S&P 500 paid dividends that exceeded the average corporate bond rate. Confidence in bonds is misplaced, according to a manager at Pioneer Investments. Credit Suisse pointed out that free cash flow (outside of the financial industry) represented 6.8% of stock prices, which is the highest level since 1960. Some suggest that retail investors need to see tangible evidence that will generate sustained growth.

-- Delivered by Feed43 service

more articles

PR Newswire – Innovative Online Stock Analysis Tool Updated
At a crucial time for Americans to build and preserve wealth, BetterInvesting, a long-established nonprofit investment education organization, is leading the way with innovative, online solutions to empower investors to take control of their financial futures. The organization recently released an enhanced version of its easy-to-use, unique Web-based program empowering users to easily and conveniently analyze stocks.

-- Delivered by Feed43 service

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