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June
13,
2009
|
|
Strong Sectors, What To Expect…
In the past three
months the
S&P
500 has climbed from 750 to almost 950, a
26% increase.
At the same time the
Mid-Cap Index,
S&P
400 is up
32%,
the
Small-Caps are up
35%
and
Internationals
are up almost
38%.
Comparison Graph*
Two Things To Expect
Market Analysts are telling us to look for two things this
year. A drop that will bring on a great buying opportunity,
then a renewed climb
back up to around 1000 for the
S&P
500.
Market Correction Coming This
Summer: Wilson*
By Jee Yeon
Park
Friday,
12 Jun 2009
Market momentum is slowing but
it’s clearly still upward,
said John Wilson, chief technical strategist at Morgan Keegan.
“We’ll get a correction
somewhere but it won’t happen when everyone is looking for
it,” Wilson told CNBC. “I think there are a lot of
institutional investors who are sitting on too much cash right
now.”
He expects the correction to
happen in the summer, but markets won’t test the March lows.
The markets are “forecasting the end of the recession.”
Wilson said it's likely that
the markets will reach 1,000 on the S&P.
Second Opinion:
S&P Pullback, then 1,000 at
Year End: Doll*
By CNBC.com*
Thursday,
11 Jun 2009
The S&P 500 index could drop
about 10 percent from current levels, but will still finish
out 2009 around 1,000,
Bob Doll, vice chairman and global chief investment officer of
equities at BlackRock, told CNBC Thursday.
"We had a 1,000 target since
the beginning of the year for the S&P we're sticking with
that," Doll said. "It looked kind of foolish in March, may
look pessimistic today with the number in the low nines
(900s), but I think we'll see 1,000. But we may see something
in the low 800s first.
The U.S. economy will
experience a noticeable recovery, but it will be
“unfortunately subpar,” Doll said.
As for talk of higher interest
rates, the speculation has probably more to do with the
normalization of our circumstances than inflation fears.
Also Read:
Market Has Room
for 10% More Upside: Art Hogan*
Wishing You The Very Best Of Returns,
The Fed’s Funds Staff
*
Included source links and/or logos serve only to further
viewer research and in no way indicates any endorsements,
sponsorships or relationships. No accuracy guarantee of their
content is implied. This information is not presented as
legal, tax or financial advice.
Reported performances of the past are not a prediction or
guarantee of future returns. |
|
June
6,
2009
|
|
Quarterly Sneak Peek…
This Quarter has been so good we’ve just got to show you a
quick preview of the upcoming End Of Quarter returns.
This
was the 10th week of the 2nd Quarter and
the fund returns are now ranging anywhere from 3% to
46%. Your funds probably fall somewhere in between, most
likely more toward the top if you’ve been keeping up.
As
with a NASCAR or a Horse Race, the leaders often change. The
chart below shows that it pays good money to go with the
winners and leave the laggers.
Loyalty is essential for success in personal relationships,
but not necessarily for successful investing in our current,
changing marketplace.
|
Best/Worst By Category - QTD |
|
|
SMALL
CAP |
QTD |
|
Royce Opportunity |
39.5 |
|
Calvert New Vision A |
15.6 |
|
MID
CAP |
|
|
Ariel Fund |
34.2 |
|
American Century Vista |
9.1 |
|
LARGE
CAP |
|
|
Legg Mason Value Trust |
28.1 |
|
Allianz Capital Appreciation |
10.8 |
|
FREEDOM FUNDS |
|
|
Fidelity Freedom 2050 |
18.9 |
|
Fidelity Freedom Income |
6.5 |
|
BALANCED
FUNDS |
|
|
Fidelity Convertible Securities |
29.6 |
|
Fidelity Asset Manager 20% |
7.6 |
|
SPECIALTY
FUNDS |
|
|
Fidelity Real Estate Investment |
46.3 |
|
Fidelity Utilities |
3.4 |
|
INTERNATIONAL-FOREIGN/WORLD |
|
|
Janus Aspen Overseas** |
40.4 |
|
Mutual Discovery |
9.6 |
|
INTERNATIONAL-REGIONAL/EMERGING |
|
|
Fidelity Emerging Markets |
36.8 |
|
Fidelity Japan |
16.1 |
**Formerly
Janus International
The
Member’s Weekly Stock Fund Chart has an additional QTD column
added this week
showing all Delta 401k stock funds.
Members may view it here:
Weekly Stock Chart PDF
Wishing You The Very Best Of Returns,
The Fed’s Funds Staff
|
|
May 30,
2009
|
|
Indications Good, Markets Responding
+
Reconsidering Portfolio Strategy…
The
article directly below is from Fidelity’s Research and
Analysis Division. Written by analysts, it tends to be a bit
technical. For Clarity and Simplicity we have bolded some of
the more important aspects.
Road to Recovery: Signals to Watch
Pleasant surprises from some key indicators
May 29, 2009
Fidelity.com
Market Analysis, Research & Education
The most
significant trend so far in the spring of 2009 is that the
pace of decline has moderated
for a handful of leading indicators that were severely
negative in late 2008 and early 2009.
In some
cases, these indicators point to stabilization, in other cases
they simply show that the rapid deterioration in the economy
has moderated. Taken together, however, they have provided
hope that the worst part of the economic recession may be in
the past, and that the economy may stabilize earlier than
expected.
An example
of a leading indicator that has improved is initial
unemployment claims. The number of people filing for
initial unemployment insurance claims is a good proxy for
layoffs, and new claims tend to be a leading economic
indicator for the direction of the labor markets (as well as
the unemployment rate itself, which is a lagging indicator).
Historically, a slowing pace of layoffs has generally preceded
a bottoming in the overall economy. During the past month or
so, while high unemployment claims demonstrated that workers
continue to lose jobs, the number of initial jobless claims
has trended down.
In March
2009 manufacturer’s new orders for non-defense capital goods—a
proxy for overall business investment activity—nudged up for
the second month in a row after hitting its lowest level since
1993 earlier in January.
Consumer
expectations, a leading indicator of consumer activity,
rebounded sharply
in April compared to the past several months (though it
remained at a low level on a historical basis).
Investment implications
The
early stages of an economic recovery are usually marked by
violent fits and starts.
A close examination of leading economic indicators shows that
while some remain negative, others have either improved or
their rate of deterioration has slowed. While these
incipient signs of stabilization helped fuel the recent stock
market rally, investors will be looking for sustained
improvement in these indicators to confirm a bottoming of
the economy.
…historical analysis of leading indicators shows that owning
stocks in the early stage of an economic upturn often has led
to favorable results.
What’s
more, investors should be wary of waiting for all indicators
to turn positive because this “all systems go” signal has
usually occurred at or beyond the end of recessions, and after
a considerable percentage of a bull market’s gains have been
recorded.
Read It
All:
Road to Recovery: Signals to Watch*
Also
Read:
Recovery hopes lift global stocks*
Reconsidering Your Portfolio Strategy?
The
last Bear Market (Tech Bubble) exposed the vulnerability of
the “Buy and Hold” Strategy. This current Credit Crisis, Bear
Market is showing the weakness of the “Diversification”
Strategy.
Is Diversification A Strategy Of
The Past?*
Wishing You The Very Best Of Returns,
The Fed’s Funds Staff
*
Included source links and/or logos serve only to further
viewer research and in no way indicates any endorsements,
sponsorships or relationships. No accuracy guarantee of their
content is implied. This information is not presented as
legal, tax or financial advice.
Reported performances of the past are not a prediction or
guarantee of future returns. |
|
May 23,
2009
|
|
Don’t Worry??
Inflation, Recession, Weak Dollar,
it seems like
something is bound to torpedo our economic recovery and sink
our stock markets again.
The
“experts” are once again all over the map, this time the doom
and gloom people have 2008 as their motivation to beat the
drums even harder. Who do we believe?
Looking back over 2008 we see that the S&P
500 experienced single-digit quarterly losses for the first
three quarters. But the fourth quarter saw a
22%
drop
that hit every
invested 401k deep and hard.
But
there was one “expert” at the beginning of the 4th
Quarter who made a loud and clear call warning Investors to
run for cover.
He was
right, things were severely out of control. After the 22%
loss came another 11% loss in the 1st Quarter of 2009.
Those who heeded Jim Cramer’s October 8th call
saved themselves from the two most severe Quarters of this
recent Bear Market.
Today Show Interview October 8th
2008:*
"Whatever money
you may need for the next five years, please take it out of
the stock market right now, this week. I do not believe that
you should risk those assets in the stock market right now."
- Jim Cramer
So What’s He Saying Now?
In the
2 minute video link below Cramer addresses Inflation fears,
deflation, recession, gold, oil, copper and the weakening
dollar.
This
quick video, made on Friday, tells us in layman’s terms that
inflation is not going to be an overall problem in the near
future. Deflation in this recessionary environment is
actually the larger concern.
As far
as he’s concerned, Fed Chairman Bernanke is doing a brilliant
job keeping the dollar weak to ignite American Manufacturing.
In
closing Cramer advises not to spend time worrying about
what may be on the back burner because those who focus on that
often miss what’s most important, namely the 2000 point run up
in the Dow in the last three months.
See
The Video:
Cramer - Forget Inflation*
Wishing You The Very Best Of Returns,
The Fed’s Funds Staff
*
Included source links and/or logos serve only to further
viewer research and in no way indicates any endorsements,
sponsorships or relationships. No accuracy guarantee of their
content is implied. This information is not presented as
legal, tax or financial advice. |
|
May 16,
2009
|
|
Considering China…
Fidelity’s China fund is appropriately named The Fidelity
China Region Fund. It is actually made up of stocks from
markets in Mainland China, Hong Kong and Taiwan.
Those
who keep up with world history and current events know that
for decades Mainland China and Taiwan have been at odds and
not too long ago there was growing hostility between the two.
But
recently improving relations have brought about a resurgence
of market improving prospects
as the following article points out:
Beijing-Taipei thaw creating investment
opportunities
By
Chris Oliver,
MarketWatch.com* 05-15-2009
HONG KONG --
Rapidly improving ties between China and Taiwan bode well for
Taipei-listed shares and other assets, analysts say.
Specifically, certain companies in the airline, technology, and
banking sectors may be best positioned to benefit from the
developing détente across the 110-mile Taiwan Strait.
Recently, bullish broker reports have highlighted cross-strait
investment themes after what were heralded as "breakthrough"
agreements between the two governments last month.
The latest agreements solidify what some are calling a new dawn
after 60 years of bitter division between the Communist-ruled
mainland and Taiwan.
Daniel Rosen, a principal with New York-based advisory Rhodium
Group, said the normalization of relations means dissipating
political risk and a lower chance of military conflict, which
in turn is leading to the elimination of a discount investors
have traditionally applied to Taiwan.
The benchmark Taiex was up 2% mid-way into Friday's session.
The index has risen about 22% since April 1, and is up about
52% since February.
In an effort to encourage Taiwan's more open attitude to Chinese
capital, analysts think Beijing will offer more carrots in the
months ahead. These include greater access to China's vast
markets, tariffs cuts that place Taiwan on par with the
preferential rates extended to South East Asian nations, and
better protection for Taiwanese intellectual assets.
Read
More:
Beijing-Taipei thaw creating
opportunities*
It is
interesting to note
that two largest holdings of Fidelity’s China Region,
Taiwan Semiconductor and China Mobile are mentioned
in the full text of the above article.
Fidelity China Region Fund
YTD
Return = 24.1%
Best
1-Year Return = 84.9%
(1999)
Worst
1-Year Return = -44.9% (2008)
See
China Region’s Stats At Fidelity.com*
Check Out
Its Funds Holdings At Morningstar.com*
Wishing You The Very Best Of Returns,
The Fed’s Funds Staff
*
Included source links and/or logos serve only to further
viewer research and in no way indicates any endorsements,
sponsorships or relationships. No accuracy guarantee of their
content is implied. This information is not presented as
legal, tax or financial advice. |
|
May 9,
2009
|
|
YTD Looking Good…
For
those who have stayed invested throughout 2009, your returns
are beating those who stayed in the Insurance Contract and
Money Market Fund Bomb Shelters.
The
chart below is a random sample of YTD Returns** from each
category. Fidelity Latin America leads this sampling with a
YTD return of +33%:
NB Genesis
NBGIX 5.0
Wells Fargo Small
Z
SSMVX 14.4
Ariel Fund
ARGFX 20.4
Oakmark Select
OAKLX
17.7
Fidelity Low
Priced
FLPSX
10.8
Janus
Enterprise
JAENX 14.0
Fidelity Equity
Inc
FEQIX
7.6
Fidelity Contra
FCNTX
4.0
Fidelity OTC
FOCPX
21.7
Janus
20
JAVLX 16.8
Janus Balanced
JABAX
6.6
Oakmark Eq &
Inc
OAKBX
4.0
Fidelity World
Wide
FWWFX 4.7
Fidelity Canada
FCIDX
16.8
Fidelity
China
FHKCX
26.7
Fidelity Latin
Amer
FLATX 33.2
Templeton Dev
Mkts TEDMX
22.1
** YTD as of 05-09-09.
Evidence piling up that worst of recession is
over
By JEANNINE AVERSA, AP
Economics Writer – Fri May 8, 2009
WASHINGTON –
Evidence is piling up that the worst part of the recession has
ended. But that doesn't mean the pain is over.
The economy
remains vulnerable to further shocks, and 13.7 million people
are unemployed. The jobless rate rose to 8.9 percent in the
new report and still seems headed for a stinging 10 percent.
Yet confidence is
building that the recession, the longest since the Great
Depression, will end this summer or fall, setting the stage
for a slow recovery.
By some measures,
the darkest months have passed. The plunges in economic
activity and rising waves of layoffs, seen from the end of
2008 through the start of this year, seem to have subsided.
"The winds are
still howling, but I think we can see the sunlight on the
distant horizon," said Mark Zandi, chief economist at Moody's
Economy.com. "Clearly, the job losses are moderating.”
Read More:
Evidence is Piling Up…*
Intelligent Investing
Three Down Days, Then Stay Away!
By: Bill Singer,
05.08.09 – Forbes.com
Since March 9, the
markets have not had three down days in a row. Until this
changes, I'm bullish!
Read More:
Three Down Days…*
See:
The Down Days Chart*
Wishing You The Very Best Of Returns,
The Fed’s Funds Staff
*
Included source links and/or logos serve only to further
viewer research and in no way indicates any endorsements,
sponsorships or relationships. No accuracy guarantee of their
content is implied. This information is not presented as
legal, tax or financial advice.
Reported performances of the past are not a prediction or
guarantee of future returns. |
|
May 2,
2009
|
|
Getting Back To Breakeven…
Many
Dire Predictions Have Been Made claiming that it will now take
impossible amounts of time for American Worker Retirement
Accounts to claw there way back to breakeven.
We’d
like to take issue with these Bell Ringers of Doom, Gloom and
Despair.
Just
to keep things in a reasonable perspective, let’s look at the
Tech Bubble burst of 2000 coupled with the 9/11/2001 Attack on
The World Trade Center (Which was virtually an attack on Wall
Street itself.)
This
Bear Market lasted for about three years then it took the
Large-Cap S&P
500 about four more years to recover to the breakeven point.
Three years down, followed by four back
up for a total of seven years.*
Now
let’s look at the positive factors that are working for us to
shorten our recovery time:
-
Some market sectors
explode back to life
after a downturn so alert investors recover sooner.
-
Many stocks and bonds continue to
pay dividends though both the ups and downs.
Since these are posted to you account much like a bonus.
-
Inflation often
cools
rather than compounds during times of recession.
Those
who are strongly invested in the healthiest sectors will
likely have a much quicker bounce back time.
The
graph link above will also show you that the Mid and Small
Indexes recovered their losses in about a year.
If Large-Cap Investors had changed from Large to Mid at the
low point they would’ve recovered their losses more than a
year sooner than if they simply stayed in the slower sector.
Compare The Progress Of Your Funds
Using
the following short-term graph you can actually see which
sectors are recovering best from this recent downturn and also
graph your own funds vs. each sector.
6-Month Index Graph*
To
Compare Your Funds Using This Graph: Click Compare, select
the Enter Name box and enter the ticker of your fund then
click the Draw Button at the bottom.
Read More in this article from Yahoo
Finance*
Wishing You The Very Best Of Returns,
The Fed’s Funds Staff
*
Included source links and/or logos serve only to further
viewer research and in no way indicates any endorsements,
sponsorships or relationships. No accuracy guarantee of their
content is implied. This information is not presented as
legal, tax or financial advice.
Reported performances of the past are not a prediction or
guarantee of future returns. |
|
April 25,
2009
|
|
The Minority Opinion…
Optimists are becoming a little easier to find these days but
overall they’re still in the minority.
But
what they have to say is refreshing to hear, tempting us to
consider the possibilities of a more complete Market recovery.
The Downturn: Is the Worst Over?
It hasn't shown
up in the government statistics yet, but we may be seeing the
first signs of an economic rebound in the U.S.
By Harold L. Sirkin
BusinessWeek.com*
April 21, 2009
Over the past few
weeks, I've met with more than a half-dozen U.S. CEOs whose
companies represent a wide range of industries. They all told
me that while their January and February performance was
predictably horrible, they had significantly exceeded their
internal forecasts in March. Their first-quarter 2009
revenue projections already had been adjusted downward from
first-quarter 2008 numbers, so they were all surprised—and
almost afraid to believe—that they were beating both their
internal projections and their previous six months'
performance.
One company that
makes luxury products, which had experienced an extraordinary
98% decline (yes, almost total) in sales, has now seen a
rebound to about 30% of its early 2008 peak. Others are seeing
unexpected sales increases of 10% to 20%.
None of them are
ready to celebrate, but they are seeing what may be the first
signs of hope.
Economist Polina
Vlasenko of the American Institute for Economic Research
reported on Apr. 10 that during the current recession,
companies have been cutting their inventories faster than in
past recessions. "And they started doing so sooner after
the peak of the business cycle," Vlasenko noted. Quite
possibly, Vlasenko suggests, the rapid inventory reductions
were made possible by "the just-in-time economy," with
improved supply management enabling firms to carry lower
inventories; when there are lower inventories during
expansionary times, reducing inventories rapidly during
slowdowns becomes easier.
What we now may
be seeing is the reverse.
When the same managers see demand increase by 10% while
inventory levels are falling rapidly, they increase production
by 20% to make up for the decline.
Confidence From The Stimulus
While some like
to argue that the stimulus has made a difference, these funds
are just now starting to filter into the economy, so the
stimulus money couldn't be the answer. However, faith in
the stimulus package's potential could be.
The Bottom Didn’t Drop Out
When consumers
and business executives realized that we were not heading for
the end of capitalism and not everyone would lose their job,
they stopped hunkering down. Companies began spending
again. Likewise, many consumers had deferred purchases for six
to nine months. But everything can't be deferred forever.*
Banks Are Lending Again
It turns out that
everyone is not a deadbeat. There are lots of viable
businesses, especially after they cut 20% out of their cost
structure. As bankers get used to this new environment, they
may be more confident in their ability to separate good risks
from bad. They also may be realizing that the spread
between the rate they pay for funds (which is now very low)
and the rate they charge borrowers is larger than it has been.
There is a lot of money to be made on good risks.
Preparing To Win
Many companies
have been getting into fighting shape during the
recession—cutting excess costs, restructuring manufacturing
facilities, etc.—and are now starting to make their moves:
buying "wounded" assets on the cheap, capturing customers from
hurting or bankrupt competitors, and attracting world-class
talent from those who can no longer afford to pay the market
rate.
Unfortunately,
the reports I hear from Europe are not the same. Just further
declines, with no signs of an upswing. Europe, which
entered the recession after the U.S., may still be working on
the downside. Hopefully, this will change soon.
Many things can
still go wrong. We are not out of the woods. But perhaps we
have reached bottom and are heading up again. Perhaps the
U.S., with our economy on the rebound, will lift the rest of
the world from recession. And perhaps we will see confirmation
of this before 2009 ends.
Read It All:
The Downturn: Is the Worst Over?*
Harold L. Sirkin is a Chicago-based senior partner of The
Boston Consulting Group and coauthor, of
GLOBALITY: Competing with
Everyone from Everywhere for Everything
(Business Plus, June, 2008)
Wishing You The Best Of Returns,
The Fed’s Funds Staff
*
Included source links and/or logos serve only to further
viewer research and in no way indicates any endorsements,
sponsorships or relationships. No accuracy guarantee of their
content is implied. This information is not presented as
legal, tax or financial advice.
Reported performances of the past are not a prediction or
guarantee of future returns. |
|
April 18,
2009
|
|
Too Good To Last Much Longer??
We’ve
Been Enjoying Six Straight Weeks of Positive Returns! Oh,
What A Feeling!!
Large-Caps are up over 27%, Mids are up almost 35% and
Small-Caps are well over 36%. How long can this party last??
Of
course no one can predict how long this run will last but the
important point here is to realize that we have had this
tremendous run-up.
So
this may not be the best time to jump back into the Market
with both feet if you’ve been sitting on the sidelines. We
are coming due for at least a week or two of negative returns.
At the
same time we need to realize that the Market has turned a
corner, recovering some of its health. There’s now a better
potential for our 401k returns to trend more positively over
the long run.
Stability With Fair Return
Many
Investors have suffered more than their fair share of losses
lately so all they’re looking for are honest returns from Fund
Managers they can trust to invest wisely.
The
Fed’s Funds Auto Pilot Ratings
have been recently updated, showing just the funds that have a
proven record for stability and wise management.
For
the convenience of our Members we have added Auto Pilot
designations on our Weekly, Quarterly and Annual Return sheets
showing those funds that have a perfect Auto Pilot record for
the past five years.
There
just are eight funds that have achieved perfect ratings out of
26 Auto Pilot Rated funds in all.
Wishing You The Very Best Of Returns,
The Fed’s Funds Staff
|
|
April 11,
2009
|
|
International Update...
“As the U.S. goes, so goes the world”,
is an appropriate way to summarize our featured article.
The
United States is the single largest engine of the world’s
economy accounting for 1/5 of it. Also being the largest
importer means many international companies rely on the health
of the US market to turn a profit.
Included below are excerpts from a
MarketWatch.com
article featuring important incites concerning the
prospects for different regions and countries. Investors
with significant international holdings would most likely
benefit from reading the
entire article*.
International Managers Pin Hopes On U.S.
Without recovery in world's biggest economy,
globe will struggle
By Sam Mamudi,
MarketWatch
April 3, 2009
"You're not going to get diversification and outperformance from
international markets if the U.S. continues its sharp
downturn," said Andrew Foster, acting chief investment officer
at Matthews International Capital Management. "But
stability in the U.S. will let the other markets stabilize and
even perform [well].”
The Eurozone,
said
Virginie Maisonneuve, head of global and
international equities at Schroder Investment Management,
is too fragmented to develop a coherent response to the
current crisis, while the U.K. is too small. As a result,
eyes are on the U.S. to lead the recovery.
"The perception is that the U.S. is going to come out of the
recession first," said David Boyle, pan-European equities
investment manager at Aberdeen Asset Management.
Bright Spots
Despite the relative gloom, there are bright spots: Latin
American funds finished the quarter flat and led all
international stock funds.
Some of this performance was due to rising commodities prices,
which have helped Brazil in particular. Brazil
typically amounts to 50% to 60% of a Latin American fund's
holdings, said William Rocco, analyst at investment researcher
Morningstar Inc.
Emerging-market
funds
finished the quarter down 1.8%. Rocco said that as with Latin
America funds, the category's return masks a variety of
country results and reasons for the performance -- while
Brazil and Russia benefited from rising commodities prices,
the economies of other well-performing countries, such as
Taiwan and Israel, are not powered by natural resources.
But despite the uncertainties, some managers still believe that
once the world recovers emerging markets will resume their hot
streak. "If we do get to stability, emerging-markets
countries are set for a pretty hard lift-off," added
Caldwell.
"The Chinese government has handled itself quite
responsibly," said Foster. "Its projects make sense and
promote growth and they're within the government's funding
ability.
China region funds
were also flat in the first quarter, according to Lipper.
The Stragglers
Look through the performance numbers and two regions stand out
for their poor performance in the first quarter: Europe and
Japan.
Maisonneuve thinks that in Europe there are political
dangers, including rising unemployment and a leadership vacuum
at the top of the Eurozone countries. She believes these
dangers will lead to volatility, and contributed to the
region's underperformance in the first quarter -- on average,
funds were down 13.3%.
The worst laggard among international stock funds was Japan
funds, down 18.2% in the first quarter.
We're seeing the vulnerability of the Japanese economy to the
global slowdown," Foster said.
Foster added that he's worried about countries in Southeast Asia
-- he said that both Thailand and Malaysia are more unstable
than he's ever seen. The social and political instability in
these countries is "the least watched issue in Asia," he said.
Pacific region funds that avoid Japan were down 1.2% in the
quarter.
Back in the U.S.
Maisonneuve said that while she's underweight in U.S. equities,
she's been increasing her U.S. holdings recently. She
added that she's been hearing more from clients interested in
the U.S. "A lot of people are intrigued, the U.S is seen as
the key to the puzzle -- there's a faith that if one
country can figure things out, it's the one that's the most
flexible and pragmatic."
Read
It All:
International managers pin hopes
on U.S.*
Wishing You The Best Of Returns,
The Fed’s Funds Staff
*
Included source links and/or logos serve only to further
viewer research and in no way indicates any endorsements,
sponsorships or relationships. No accuracy guarantee of their
content is implied. This information is not presented as
legal, tax or financial advice.
Reported performances of the past are not a prediction or
guarantee of future returns. |
|
April 4,
2009
|
|
Index Investing Gets Hammered…
2008
was generally better to Index Fund Investors than it was to
those in managed mutual funds. While in 2007 the Fund
Managers beat their Indexes handily.
Here
we are at the end of the First Quarter of 2009 and the Fund
Managers are winning again, hands down.
It
would be quite a job to name all the Domestic Delta 401k funds
that beat their index so to save time and space we’ll name
the few that didn’t make the grade. Then we’ll point out
the handful of funds that actually turned in positive results
for the first quarter.
Lost To The Index
Small
Caps:
FMA Small Company
Mid-Caps:
Alliance Bernstein Small/Mid Value, Fidelity Value, Lord
Abbett Mid-Cap Value, Mutual Shares, Virtus Mid-Cap Value,
Ariel Appreciation, Ariel Fund and Baron Asset Fund
Large-Caps:
DWS Dreman High Return Equity, Fidelity Equity-Income,
Fidelity Equity-Income II, Lord Abbett Affiliated, Morgan
Stanley Large Relative Value, USAA Income Stock, Van Kampen
Growth &
Income, Fidelity Growth and Income and Fidelity Growth and
Income II
Balanced Funds:
Black
Rock Balanced Capital, Fidelity Global Balanced and Van Kampen
Equity and Income
The
other 103 Domestic Funds all turned in Index Beating
Performance!
A Positive Quarter!
We
have now had six consecutive
negative quarters
so it’s very encouraging to see some of
our funds moving back into the
black!
Mid-Caps:
Alger Mid-Cap Growth, Artisan Mid Cap
Large-Caps:
Fidelity OTC, Janus Twenty, Legg Mason Partners Large Growth,
Morgan Stanley Large Growth, TCW Galileo Select Equities and
Touchstone Sands Capital Select
Members can view their fund’s Quarterly Performance:
Quarterly
Compare your Fund’s Performance to its Index:
Meeting & Exceeding
Wishing You The Best Of Returns,
The Fed’s Funds Staff
|
|
March 28,
2009
|
|
A Break In The Weather…
Like
Weather Conditions Across The Nation, Market Conditions Are
Always Changing, bringing sunshine to some sectors and rain to
others.
It’s
our job as Investors to keep most of our money where the sun
is shining and less where flood waters are devastating the
investing terrain.
Keeping mindful that the rains will subside, and eventually
produce growth in those devastated areas when the sunny days
return.
Fun In The Sun
For
the past three weeks the sun has shown broadly across the
market
giving us our first three week back-to-back positive stretch
since April of 2008.
This
ray of hope came mostly from optimism about the Financial
Sector so bank stocks along with the funds that hold them
have soared.
Health
Sector
stocks have also taken off largely because of anticipated
Gov’t Health Care Programs.
Many
Tech Stocks have soared as well because of the trillions
of dollars being added to our money supply. As more
dollars are added the dollar likewise drops in value
internationally.
This
benefits those U.S. Tech Companies that export, making their
products cheaper overseas. So the sun is shining for them as
well.
More about Tech Stocks:
Tech Stocks: Mad Money*
Sector Heavy Funds
Here
are some of the Funds that are making heavy bets on these
warming sectors:***
Alliance Bernstein Small/Mid-Cap
Value* 24% Financials
Fidelity Equity-Income*
Large-Cap Value 20% Financials
Morgan Stanley Value*
Large-Cap Value 23% Financials
Lord Abbett Affiliated*
Large-Cap Value 39% Financials
Fidelity OTC* Large-Cap
Growth 28% Tech**/23% Health
LeggMason Partners Large Growth*
27% Tech**/27% Health
** Hardware+Software
*** Holdings are approximate
Here’s
A Year-To-Date Graph Comparing Their Performance:*
AllianceBernstein
Equity-Income MSValue
LordAbbett OTC
LeggMason
Wishing You The Best Of Returns,
The Fed’s Funds Staff
*
Included source links and/or logos serve only to further
viewer research and in no way indicates any endorsements,
sponsorships or relationships. No accuracy guarantee of their
content is implied. This information is not presented as
legal, tax or financial advice.
Reported performances of the past are not a prediction or
guarantee of future returns. |
|
March 21,
2009
|
|
The Right Medicine??
The Market will vote this week…
It’s been a year
since the banking/mortgage crisis began to turn ugly. In March 2008 the Fed gave Bear Stearns Securities
an emergency loan to keep them afloat. Soon the 350 billion
dollar company was sold for just over one billion dollars.
Ouch.
The Government has since shoveled good money after bad trying to
stabilize and prop up faltering financial institutions.
Very little was aimed directly at fixing the economy
consequently the Market showed its disappointment by dropping
40% in the last year.
But lately the
Market has given a thumbs-up
on the Fed’s plan to pump 1.2 Trillion into the economy
purchasing Gov’t Bonds and Mortgage backed Securities.
The aim here is to dramatically lower mortgage rates, coaxing
reluctant home-buyers and home-lenders to make the deals of a
lifetime.
Fed launches bold $1.2T effort to
revive economy*
More Meds Coming
More Meds are on
the way this week
as the Treasury Department lays out a plane to “cleanse” bad
risk loans from the balance sheets of struggling banks. The
idea is to repackage them into sellable blocks then market
them to Investors willing to share the risk.
This long overdue medicine should be well received by all
accounts. But the Market will have its say on the plan
when it’s rolled out this coming week.
Geithner Puts Finishing Touches
on Plan to Revive Banks*
Form An Opinion Then Double Check
As it’s been working out, the Market has first expressed its
opinion of these plans up or down, then over time it
evaluates the actual performance of the plan,
making necessary corrections up or down.
Concerned
Investors should do the same thing.
First expressing their opinion of a fund by purchasing
or selling it. Then over time evaluate the actual
performance making the necessary corrections.
Proceeding only on
our first opinion
then
failing to evaluate and make corrections puts our 401k
portfolio and retirement life-style at risk over and over
again.
Evaluating Sector Strength
The chart below** shows 13-week (down-market) strength along side
the short-term (up-market) strength of the major U.S. market
sectors. The top 3 performers in each time period are
highlighted.
**Data
from Morningstar.com Index Page*
Wishing You The Best Of Returns,
The Fed’s Funds Staff
|
|
March 14,
2009
|
|
Upturn or Rerun??
WOW!!
What A Great Week For The Market! The S&P
500 turned in a +10.7% performance while the Small and
Mid-Caps were even higher.
Could
this be the beginning of the much hoped for Turnaround, or a
Rally in the middle of a long Bear Market, or just a Market
Bounce before the next big slide??
There Is A Pattern
Well,
we’ve actually seen this before. Although not in double digit
positives, we have seen two other solid positive weeks this
year for the S&P
500. Unfortunately they were followed by four solid negative
weeks.
S&P
500 YTD - Week By Week
|
2-Jan |
9-Jan |
16-Jan |
23-Jan |
30-Jan |
6-Feb |
13-Feb |
20-Feb |
27-Feb |
6-Mar |
13-Mar |
|
6.8 |
-4.4 |
-4.5 |
-2.1 |
-0.7 |
5.2 |
-4.8 |
-6.9 |
-4.5 |
-7.0 |
10.7 |
What Does A Healthy Market Look Like??
It’s
Been A Long, Long Time Since We’ve Seen Healthy Market
Performance! The last glimpse we had was in April of 2008
when we saw positive weeks combining to overwhelm the negative
weeks:
S&P
500 - 2008
|
4-Apr |
11-Apr |
18-Apr |
25-Apr |
2-May |
9-May |
|
4.2 |
-2.7 |
4.3 |
0.5 |
1.1 |
-1.8 |
So
when we see positive returns over time outdoing the
negative, we can begin to have confidence in the Market again.
Up Is Overdue
It
is interesting to note that the S&P
500 has been through Six Consecutive Losing Quarters
(including the present quarter).
We
honestly feel that the Market can only hold its head
underwater for so long without coming up for air. From this
vantage point the coming 2nd Quarter has a very
good chance of being the first positive quarter since the 3rd
quarter of 2007.
U.S. Stocks
Post Steepest Gain Since November as Banks Rebound
By Lynn Thomasson March 14, 2009
Bloomberg.com*
U.S. stocks ended a four-week losing streak with the
steepest rally since November after the nation’s three largest
banks said they’ve become profitable and General Electric Co.
said losing the top credit rating at Standard & Poor’s won’t
hurt business.
“It’s been a terrific week,” said Fritz Meyer, the Denver-
based senior market strategist for Invesco Aim, which oversees
$357 billion. “It would make sense for the market to bottom
here and start to rebound as the economic recovery unfolds.”
The
S&P 500* rallied 11 percent to 756.55, recovering from the
12-year low of 676.53 reached on March 9th.
The S&P 500 has risen in only two of 10 weeks this year as
falling shares of banks raised concern the government would be
forced to nationalize some lenders. The U.S. stock benchmark
has declined 16 percent in 2009.
The S&P 500’s last rally was a 24 percent rise between Nov.
20 and Jan. 6 on optimism President Barack Obama’s economic
stimulus package would end the recession. The index then
tumbled 28 percent through March 9 as the economic slump
intensified and companies from GE to JPMorgan cut dividends.
“This is a bear market rally,” David Darst, chief
investment strategist at Morgan Stanley Global Wealth
Management in New York, said in a Bloomberg Television
interview. “Fundamentals are rough right now.”
“The gains in U.S. stocks occurred even as confidence among
American consumers held close to a 28-year low, reflecting
mounting job losses amid a deepening recession. The
Reuters/University of Michigan preliminary index of consumer
sentiment climbed to a higher-than-estimated 56.6 from 56.3 in
February. The gauge reached a 28-year low of 55.3 in
November.”
“The market was ready to have any whiff of good news,” said
Scott Jacobson, chief investment strategist at volatility
trading firm Capstone Sales Advisors in New York. “I don’t
think we’re ready to rally for weeks at a time right now.”
Read The Article:
U.S. Stocks Post Steepest Gain
Since November*
Wishing You The Best Of Returns,
The Fed’s Funds Staff
Helping You To
Make Good Moves!
FedsFunds.com
*
Included source links and/or logos serve only to further
viewer research and in no way indicates any endorsements,
sponsorships or relationships. No accuracy guarantee of their
content is implied. This information is not presented as
legal, tax or financial advice.
Reported performances of the past are not a prediction or
guarantee of future returns. |
|
March 7,
2009
|
|
In or Out??
The
“Experts” are all over the map these days.
Some say,
“we
are near the bottom and it’s a great time to buy in.”
Others say,
“Oh
no, the Market is headed even farther down keep your money
safe.”
If the
truth was told, everyone is just guessing and no one really
knows for sure. Your guess and mine have just as much chance
of being right as the “Experts” these days.
Money
In
For
those who want to keep some of their money in the Market we’ve
found a couple of articles that recommend four of the Delta
401k Funds.
The first article is titled
16 Growth Funds For Recovery*
and they highlight the Janus Fund and Fidelity
Contra Fund.
The second article is titled
12 Flexible Funds For Navigating This
Market*
and they point out Fidelity OTC and Fidelity Focused
Stock Fund.
Those
who want to reduce the downside risk of their invested money
even more may want to look at the Janus Balanced Fund.
Here’s
a YTD Graph for the above funds
showing performance in both the up and down directions for
2009 so far:
Janus,
Contra, OTC,
Focused
& Janus Balanced*
Money Out
Back
in September of 2008 we pointed out to our Readers that the
safest place to find “Shelter In This Storm” was the Delta
Credit Union Fund found in our 401k.
Money
in this fund was then insured for up to $100,000 by the NCUA.
This insurance has been expanded to $250,000 whether you are a
Credit Union Member or not!
The current returns of this fund are about +2.4% annually. To
see more details of this fund, Log-In to your
401k Account,
select Investment Choices and Research in the left column then
scroll to the bottom of the listing. Click on DCCU to
view fund details.
Wishing You The Best Of Returns,
The Fed’s Funds Staff
*
Included source links and/or logos serve only to further
viewer research and in no way indicates any endorsements,
sponsorships or relationships. No accuracy guarantee of their
content is implied. This information is not presented as
legal, tax or financial advice.
Reported performances of the past are not a prediction or
guarantee of future returns. |
|
February 28,
2009
|
|
International Alert!!
As
International Investors, many of us find ourselves investing
in countries that we don’t really keep track of.
Is
this really a good place to expect growth and consistent
returns for the future? Where are the landmines in this
investing environment and how do I avoid them?
The
article below gives us a “Heads-Up” on Investing in Europe.
Do you know how many European Companies are part of your
portfolio? We’ll show you how to find out at the end of
this Update.
Europe's
Crisis: Much Bigger Than Subprime,
Worse Than U.S.
By Henry
Blodget Feb 27, 2009
From Yahoo
Finance,
Tech-Ticker*
John Mauldin,
president of Millennium Wave Advisors, was among the few
analysts whose forecasts for 2008 proved accurate.
This is why some folks
think the dollar is going to remain strong over the coming
months: Because the
rest of the world is falling apart even faster than we are.
As John Mauldin explains,
fixing the problem in Europe will be even more difficult than
it is here:
The
problem is that in Europe there are many banks that are simply
too big to save.
The size of the banks in terms of the GDP of the country in
which they are domiciled is all out of proportion. For my
American readers, it would be as if the bank bailout package
were in excess of $14 trillion
(give or take a few trillion). In essence, there are small
countries which have very large banks (relatively speaking)
that have gone outside their own borders to make loans and
have done so at levels of leverage which are far in excess of
the most leveraged US banks. The ability of the "host"
countries to nationalize their banks is simply not there. They
are going to have to have help from larger countries. But as
we will see below, that help is problematical.
This has the
potential to be a real crisis, far worse than in the US.
Without
concerted action on the part of the ECB and the European
countries that are relatively strong, much of Europe could
fall further into what would feel like a depression.
There is a
problem, though. Imagine being a politician in Germany, for
instance. Your GDP is down by 8% last quarter. Unemployment is
rising. Budgets are under pressure, as tax collections are
down. And you are going to be asked to vote in favor of
bailing out (pick a small country)? What will the voters who
put you into office think?
We are going
to find out this year whether the European Union is like the
Three Musketeers. Are they "all for one and one for all?" or
is it every country for itself?
Read It All:
Europe’s Crisis: Much Worse Than
U.S.*
Check
your International Fund’s Top 25 Holdings and their Country of
Origin.
Click
the link below then Copy
&
Paste your Fund Ticker
in the “Quotes” Box at the top of the page:
Morningstar.com, Top 25 Holdings:
FWWFX*
INTERNATIONAL-WORLD STOCK FUNDS
Dreyfus Founders Worldwide Growth
F FWWRX
DWS Global Opportunity
SGSCX
Fidelity Worldwide
FWWFX
Hartford International Capital
Appreciation Y
HNCYX
Morgan Stanley Inst. Global Value Eqty
MSGEX
Mutual Discovery
MDISX
Neuberger Berman International
Trust
NBITX
Templeton Growth A
TGADX
Templeton World A
TEMWX
INTERNATIONAL-FOREIGN STOCK FUNDS
Artisan International
ARTIX
Calvert World Values-International.
Equity CWVIX
Fidelity Aggressive International
FIVFX
Fidelity Diversified International
FDIVX
Fidelity International Discovery
FIGRX
Fidelity Overseas
FOSFX
Janus Aspen International Growth I
JIGRX
Morgan Stanley Inst. Active
International
MSACX
Morgan Stanley Inst. International
Equity MSIQX
Templeton Foreign A
TFFAX
Templeton Foreign Smaller Companies
A FTFAX
Templeton Foreign Equity Series
TFEQX
USAA International
USIFX
INTERNATIONAL-REGIONAL FUNDS
Fidelity Canada
FICDX
Fidelity China Region
FHKCX
Fidelity Europe
FIEUX
Fidelity Europe Capital
Appreciation
FECAX
Fidelity Japan
FJPNX
Fidelity Japan Smaller Companies
FJSCX
Fidelity Latin America
FLATX
Fidelity Nordic
FNORX
Fidelity Pacific Basin
FPBFX
Fidelity Southeast Asia
FSEAX
INTERNATIONAL
EMERGING MARKETS
Fidelity Emerging Markets
FEMKX
Morgan Stanley Emerging Markets
MGEMX
Templeton Developing Markets
TDADX
USAA Emerging Markets
USEMX
Wishing You The Best Of Returns,
The Fed’s Funds Staff
|
|
February 21,
2009
|
|
High-5,
Beating The Index…
On
November 20th 2008 the Market hit bottom and the S&P
500 closed at 752.44. Now exactly three months later it has
gained only 2.3%.
But
in those same three months many of our Delta 401k Funds have
made strong double digit gains proving that many of our Fund
Managers are earning their keep!
Example: S&P
500 vs. Fidelity OTC*
The
chart below shows the Top Five in each Category from
Fed’s Funds
High-5,
Small,
Mid,
Large,
Balanced
and
International:
|
Fund/Index
Name |
YTD |
3-Months |
|
S&P 500 |
-16.7% |
+2.3% |
|
TCW Small Cap Growth |
-7.2% |
+15.8% |
|
RS Inv Emerging Growth |
-6.2% |
+15.6% |
|
Alger Small Cap Growth |
-7.4% |
+11.2% |
|
WellsFargo Small Value Z |
-10.5% |
+10.6% |
|
Fidelity Sm Cap Stock |
-14.7% |
+6.5% |
|
Alger Mid Cap Growth |
-6.6% |
+14.3% |
|
Artisan Mid Cap |
-6.2% |
+12.0% |
|
Old Mutual Mid-Cap |
-10.1% |
+11.9% |
|
Fidelity Low-Priced Stock |
-10.0% |
+9.4% |
|
Fidelity Aggressive Gro |
-7.0% |
+9.2% |
|
Touchstone Select |
-1.9% |
+13.3% |
|
Fidelity OTC |
-3.9% |
+12.2% |
|
Neuberger Partners |
-11.5% |
+11.4% |
|
Legg Mason Aggess Gro |
-5.8% |
+10.3% |
|
Janus Large Cap Gro |
-7.0% |
+9.3% |
|
Janus Balanced |
-3.4% |
+6.2% |
|
Fidelity Asset Mgr 50% |
-5.2% |
+4.3% |
|
Fidelity AM 70% |
-8.1% |
+4.1% |
|
Fidelity Asset Mgr 20% |
-1.1% |
+3.9% |
|
Morg Stan Balanced |
-7.5% |
+1.7% |
|
Fidelity Latin America |
-4.0% |
+18.3% |
|
Janus International Gro |
-5.1% |
+11.1% |
|
Fidelity Intl Cap Apprec |
-17.1% |
+6.0% |
|
USAA Emerg Markets |
-11.9% |
+4.8% |
|
Fidelity China Region |
-9.4% |
+2.4% |
On good days and down
days the Top
High-5
Funds are beating the
Market, hands down!
Below we’ve included a chart from
Fed’s Funds Bonds
showing the Top 15 Bond Funds YTD and for the Past Three
Months:
|
Bond
Fund/Index Name |
YTD |
3-Months |
|
S&P 500 |
-16.7% |
+2.3% |
|
Fidelity
US Bond Index Fund |
+0.1% |
+4.7% |
|
Fidelity New Markets |
-0.2% |
+12.4% |
|
PIMCO High Yield |
-0.5% |
+9.5% |
|
PIMCO Real Return |
+2.3% |
+9.0% |
|
Western Asset Core |
-1.5% |
+8.3% |
|
Managers Bond |
+1.7% |
+8.2% |
|
Neuberger Core Bond |
+0.1% |
+7.3% |
|
Fidelity Capital & Inc |
+2.2% |
+6.9% |
|
Fidelity Strategic Income |
+0.6% |
+6.6% |
|
Janus Flexible Bond |
+1.0% |
+6.2% |
|
PIMCO Long-Term Govt |
-4.3% |
+6.1% |
|
PIMCO Global Bond |
-2.6% |
+5.9% |
|
PIMCO Total Return |
+0.8% |
+5.8% |
|
USAA Income |
+0.7% |
+5.3% |
|
Fidelity Intermediate Bond |
+1.7% |
+4.9% |
Most
of these funds are above water for the YTD as well as the past
3 months.
Wishing You The Best Of Returns,
The Fed’s Funds Staff
*
Included source links and/or logos serve only to further
viewer research and in no way indicates any endorsements,
sponsorships or relationships. No accuracy guarantee of their
content is implied. This information is not presented as
legal, tax or financial advice.
Reported performances of the past are not a prediction or
guarantee of future returns. |
|
February 14,
2009
|
|
Start Your Engine!!
Delta and Fidelity are now offering us some much needed 401k
support through a company called
Financial Engines
®.
Financial
Engines
provides personalized, on-line 401k advice (for free)
as well as portfolio management (for a fee); they’ve been
doing this for about 10 years.
If you
engage them to manage your portfolio, the fees will be
deducted from your 401k account balance. The fees are as
follows:
0.45%
per year for the first $100,000 in your account;
0.35%
per year for the next $150,000 in your account;
0.20%
per year for the amount above $250,000.
Doing
the math, this is what would be deducted from your 401k
annually:
$50,000 = $225 $100,000 =
$450
$150,000 = $525 $200,000 =
$700
$300,000 = $600 $400,000 =
$800
The Best Part Is Free!
One of
the most important parts of retirement planning is knowing
whether or not you are financially on-track
for a successful retirement.
Delta
last gave Employees a retirement readiness or “on-track”
assessment back in 2000. Since then we’ve seen several major
changes to our retirement plan as well as our financial
ability to retire.
Now
with Financial Engines we all have free access to a readiness
assessment that’s updated everyday.
Actually they call it a “forecast” and it not only tells you
your chances of reaching your retirement income goals but if
you need them, they’ll also give you suggestions on how to
improve your chances of meeting those goals.
Once
you’ve entered your initial sign-up info, each time you enter
the Financial Engines web site (through your NetBenefits
link) you’ll see statements saying something like this:
“We estimate you will have $46,300 per year of income in
retirement.
“You have a 46% chance of reaching
your retirement goal of $55,000. Consider reviewing your plan
for retirement or we can provide professional help.”
The Fine Print…
Be
aware
that
if you choose to have Financial Engines actually manage your
portfolio there are some circumstances and conditions that you
should know up front.
From the F.E. Delta Supplemental:*
Because the
Program operates by providing FE full authority to give
Provider investment directions on your behalf, once you are
enrolled in the Program, you will not be able to make
investment directions
(changes)
directly through Provider
(Fidelity).
If
there are any exceptions to this provision, they are set forth
here: None.
You can again
exercise direct investment control of your Plan account after
canceling your participation in the Program.
You can cancel from the Program at any time, with no penalty,
by calling FEA, as described in the Terms and Conditions. FE
will typically process a request for cancellation within a few
business days and forward the request to the Provider. Upon
the Provider’s completion of the processing of the
cancellation, you will again be able to direct investment of
your Plan account.
Also
notice below that your portfolio would be reviewed only on a
quarterly basis, no one will be reviewing its needs on a daily
or an “as the market dictates” basis.
From the F.E. Disclosure Brochure:*
Account reviews. For
participants enrolled in the Program, FEA generally conducts
account reviews quarterly.
The account review process begins with an automated analysis
of the account, which generates a progress report and proposed
adjustments, if applicable, to the target allocation.
How Good Are They??
For
those who are wondering about Financial Engine’s track record
as far as managing money in 401k portfolios, nothing is
mentioned on their website that discloses their past
performance in this area.
Also,
Delta Employee inquiries directed to their Advisory Department
have generally been rebuffed with this type of response:
“Unfortunately, Financial Engines is not able to provide you
with a comparative study of how your account would have done
under our management during the past few years. All investors
utilizing our program are in customized allocations given the
length of time they have until retirement and the amount of
risk they are looking to take in the marketplace. Because
these investment strategies are customized and are based on
investment selections which are different for each employer
sponsored plan, Financial Engines is not able to provide
annualized performance information. You are able to review the
performance information for each of the funds available to you
through your Delta 401(k) by contacting your 401(k) plan
provider, Fidelity, at 1-800-554-0262.”
Wishing You The Best Of Returns,
The Fed’s Funds Staff
*
Included source links and/or logos serve only to further
viewer research and in no way indicates any endorsements,
sponsorships or relationships. No accuracy guarantee of their
content is implied. This information is not presented as
legal, tax or financial advice.
Reported performances of the past are not a prediction or
guarantee of future returns |
|
February 7,
2009
|
|
We’ve Been Here Before…
The
artificial run-up in value
for both the .com bubble and the real estate/credit bubble,
loom like two gigantic, twin mountains on the
S&P
500 Lifetime Graph.*
Without
the artificial, euphoric run-ups the graph would most likely
resemble the more realistic growth rate shown prior to 1995.
So as
you view the graph, simply draw a line starting at the
beginning of 1995 to the low point of 2002.
Then using the established growth curve continue on to today.
Now
you’ll have a better idea of what the real value of the Market
actually is.
As you
can see, this very simple analysis uses growth rate data
dating back over 50 years. You’ll also notice that as we
stand today, the Market is significantly undervalued.
Sure it
could go lower; but the hard part there would be maintaining
enough downward pressure to keep market prices lower.
The
main point is that shares bought today are being purchased
well below actual market value.
Maybe not absolute rock bottom, only time will tell us that.
Still,
we do know that once the Market turns up for good, rock bottom
pricing will disappear probably for quite a while if the past
.com bubble is a reliable indicator.
Some Good News
Since
the Market Low
(3rd
week of November 2008) all Indexes have made
positive
gains.
As you can see from the chart below, some sectors are making
better progress than others.
So
we’ll be watching our funds closely and holding them
accountable for digging us out of the hole that they put us
in.
Since Market Low, Nov. 2008:
|
RUSSELL 2000
SMALL |
+15.7 |
|
S&P 400
MIDCAP |
+20.0 |
|
S&P 500
LARGECAP |
+8.4 |
|
NASDAQ |
+15.0 |
|
Dow Jones
30 Ind. |
+12.0 |
Buffett's Metric Says It's Time To Buy
According
to investing guru Warren Buffett, U.S. stocks are a logical
investment when their total market value equals 70% to 80% of
GNP.
By Carol J. Loomis and Doris Burke
February 4, 2009
Fortune Magazine*
Is it time to
buy U.S. stocks?
According to
both this 85-year chart and famed investor Warren Buffett, it
just might be. The point of the chart
(see article)
is that there should be a rational relationship between the
total market value of U.S. stocks and the output of the U.S.
economy - its GNP.
Read the Article:
Buffet: It’s Time To Buy*
Cramer's 10 Reasons for Optimism
Mad
Money Recap: TheStreet.com*
02/06/09
While market
skepticism is thick, Cramer told viewers of his "Mad Money" TV
show Friday that there are 10 things that are actually going
right at the moment.
Cramer said
today's market resilience in the face of the horrible
unemployment numbers means something. Here's what he thinks is
working:
10 Reasons for Optimism: Cramer*
Wishing You The Best Of Returns,
The Fed’s Funds Staff
*
Included source links and/or logos serve only to further
viewer research and in no way indicates any endorsements,
sponsorships or relationships. No accuracy guarantee of their
content is implied. This information is not presented as
legal, tax or financial advice.
Reported performances of the past are not a prediction or
guarantee of future returns |
|
January 31, 2009
|
|
Will Economy Respond To Medicine???
With
January’s S&P
500 loss of over
8%
the Market has predicted its fate for 2009. But the bigger
question remains, Will the new Administration turn this
economy around or just bury it deeper in recession this coming
year?
So far
it seems that a lasting restoration of confidence is becoming
more and more illusive for the present Administration much
like it was for the last.
Will all
the prescriptions from the various governmental agencies
finally give us the much looked for turnaround?
Or
are we experiencing a “virus” that must run its course and all
the meds can do is help to relieve some of the symptoms along
the way?
February will probably see the Market predict whether or not
the Administrations Big Shot of Medicine will be effective.
So a down-market for February would most likely amount to a
pessimistic “I don’t believe it, show me” opinion.
US set for ‘big bang’ financial clean-up
By Krishna Guha Financial Times *
Published: January 30 2009
The Obama
administration is gearing up for a “big bang” announcement
within the next two weeks
that will combine a bank clean-up with measures to reduce home
foreclosures and probably steps to kick-start credit markets.
The “big
bang” approach reflects the belief of Tim Geithner, Treasury
secretary, and Lawrence Summers, National Economic Council
director, that the Bush administration was wrong to dribble
out policy initiatives.
Mr. Geithner intends to present a “comprehensive” plan that
policymakers hope will command market confidence.
Read
More:
“Big
Bang Financial Clean-Up”*
Also
Read:
As goes January, so goes the
year?*
S&P has worst January drop ever in month known to predict
market direction From
MarketWatch.com*
Wishing You The Best Of Returns,
The Fed’s Funds Staff
*
Included source links and/or logos serve only to further
viewer research and in no way indicates any endorsements,
sponsorships or relationships. No accuracy guarantee of their
content is implied. This information is not presented as
legal, tax or financial advice.
Reported performances of the past are not a prediction or
guarantee of future returns. |
|
January 24, 2009
|
|
The Next Few Weeks Could Be Crucial…
It’s January and time to start checking the “barometer”.
Traditionally we look at January, the barometer month, to get
an indication of how the rest of the year will look for the
Stock Market.
Honestly, we don’t actually believe that we are in for two
identical years in a row, but at this point things are looking
a lot like last January for stocks.
In
January of 2008,
the S&P
500 experienced an
8.9%
drop
during the first part
of the month, followed by a partial recovery, to a
final
loss of 6.1%.
The Troubling Stock Market
By: Ben Steverman BusinessWeek.com
Jan. 21, 2009
The performance of the stock market so far in January has been
disturbing. The S&P 500 is down about
9% so far this year.
In 2008, the S&P 500 tumbled 38%. A rally in December trimmed
some of 2008’s losses, but many assumed the market was already
priced for a very tough economic environment in 2009.
Bruce Bittles, chief investment strategist at R.W. Baird &
Co., says that, given last year’s losses and “the huge
sums” of cash already sitting in money market funds, “the
persistent selling is surprising.”
“This forces the question whether October and November
represented a selling climax and the lows for the cycle?” he
asks.
Bittles says there’s historical evidence that stocks correct
just before a new president takes office and rally within a
week or two after inauguration day. We’ll see whether a
post-Obama rally materializes.
The stock market’s performance in the next few weeks could be
crucial. For one thing, there is the
“January
Barometer**,”
identified by the
Stock Trader’s Almanac**.
The idea is that as January goes, so goes the year. It’s been
accurate 91% of the years since 1950, and it was certainly
correct last year.
The first month of the year can give investors important clues
to the financial, political and business climate of the coming
year.
For another thing, a strong, or at least stabilizing, stock
market could help prop up a weak economy. Bittles notes:
The stock market is
critical to the economy for many reasons not the least of
which is the confidence factor. Almost without exception,
financial crises that tend to overstay their welcome do so
because of the loss of confidence. If the economy is to
bottom in the first quarter as expected and stabilize by
mid-year, a new low in the popular averages would place that
in jeopardy.
Another collapse in the stock market would be bad news not
just for investors but for everyone else too.
Read:
The Troubling Stock Market**
All this speculation simply reminds us of the absolute
importance of consistently looking for the best performing
funds and protecting our principle,
rain or shine.
Using an umbrella or running into a building when it starts
raining hard can
keep us ahead of the game in this type of stock market.
“Battle Tested”
SmartMoney
magazine recently analyzed more than 5,000 mutual funds to
come up with the 100 Best Time-Tested Funds.
Number 1
Fidelity
Contrafund
(10-year return*: 2.8%)
No. 11
Fidelity Growth Company
(10-year return*: 1.6%)
No. 78
Fidelity Capital Appreciation
(10-year return*: 1.2%)
No. 80
Fidelity Puritan
(10-year return*: 2.0%)
*10-year annualized return representing calendar years
1999 – 2008
(As reported by Morningstar.com)
Read the article:
100 Battle Tested Funds**
Honorable
Mention
With all due respect to SmartMoney’s selection process and
the winning Fidelity Funds, we would like to submit the
following Delta 401k Funds for Honorable Mention:
Mutual Discovery (10-year return*: 9.2%)
Neuberger-Berman Genesis
(10-year return*: 9.1%)
Allianz NFJ Small Cap Value
(10-year return*: 8.9%)
Oakmark Equity and Income
(10-year return*: 8.7%)
AIM Mid Cap Core Equity
(10-year return*: 6.5%)
*10-year annualized return representing calendar years 1999 –
2008
(As reported by Morningstar.com)
Additionally these funds ranked in our Top 20 Performers
for 2008 as well as the cumulative past four years.
Wishing You The Best Of Returns,
The Fed’s Funds Staff
*
Included source links and/or logos serve only to further
viewer research and in no way indicates any endorsements,
sponsorships or relationships. No accuracy guarantee of their
content is implied. This information is not presented as
legal, tax or financial advice.
Reported performances of the past are not a prediction or
guarantee of future returns. |
|
January 17, 2009
|
|
Where The Money Is Flowing…
Stocks Lost
Big In 2008 and at the same time received 99% of all the
financial press coverage. Meanwhile the Market Sector that
actually made money just smiled and kept quiet, all the way to
the bank.
Who made
money in 2008?? Those who kept an eye on the Top Performers
in the left hand column know that it was the Government Bond
Funds that turned in healthy 2008 profits.
|
BOND
FUNDS |
2008 |
|
Pimco
Long-Term US Gov |
13.6 |
|
Fidelity
Ginnie Mae |
6.6 |
|
Fidelity
Govt. Income |
10.6 |
|
USAA
GNMA Trust |
6.8 |
|
Wells
Fargo Govt. Securities |
7.9 |
|
Fid.
Instl Short-Intermediate Gov |
7.7 |
Basically,
Depression reared its ugly head and many Investors fled to the
Government for shelter.
As this
recovery matures Investors will steadily come out from under
the Government umbrella and look for returns in the normal
marketplace. But not necessarily the broad marketplace.
As we look at
2009 we’d like to know; Will the Obama “infrastructure
stimulation” spending breathe new life to the rest of the Bond
Market? Will Corporate Bonds benefit from the many contracts
that are sure to come out of this bailout package?
Is this where
the 2009 investment money will flow?? Where are the best
opportunities for our investments to grow??
Munis look good as gov't spigot stays open
By Laura Mandaro,
MarketWatch.com*
Jan. 8, 2008
SAN FRANCISCO
(MarketWatch)
--
Debt-ridden states and local governments are poised for a
bailout under the incoming Obama administration, presenting a
buying opportunity for downtrodden municipal bonds, Pimco
founder Bill Gross said Thursday.
Gross, whose management of the world's largest bond fund has made
his recommendations closely watched, said he anticipates that
the White House under President-elect Barack Obama will
"quickly be confronted by the need to provide those hundreds
of billions of dollars to states and large municipalities.”
"Municipal bonds then, selling at historically high ratios relative
to U.S. Treasurys, offer attractive price-appreciation
potential," Gross wrote in monthly commentary posted to
the Web site of the Pacific Investment Management
Co., known as Pimco.
"Pimco's view is simple: shake hands with the government; make them
your partner by acknowledging that their checkbook represents
the largest and most potent source of buying power in 2009 and
beyond," according to Gross.
The $129 billion
Pimco Total Return bond fund
PTTRX*,
which he manages, returned 4.8% last year compared with a
nearly flat performance in the comparable benchmark.
Read It All:
Buy
Munis ahead of Obama bailout*
Opportunities
Abound in the Bond Market
From
Yahoofinance.com
By Christine Benz
Morningstar.com*
Jan.15, 2009
Christine Benz: I've been
hearing that there are a lot of great opportunities in the
corporate-bond market right now. Would you say that's the
case?
Lawrence Jones: A lot of
managers we respect, from Bill Gross at PIMCO Total Return to
Dan Fuss at Loomis Sayles Bond and others, have been finding
some great opportunities in high-quality investment-grade
bonds, which have traded really to almost unprecedented
levels.
There has been a dramatic
dislocation in the corporate market. There has been a lot of
illiquidity. And as we've seen bond prices decline, some
high-quality corporations' senior debt now yields 7% or 8% for
fairly minimal credit risk. When you see yield levels on
bonds like that, it's not surprising that a lot of managers
are finding opportunities there.
Read It
All:
Opportunities
Abound in the Bond Market*
Wishing You The Best Of Returns,
The Fed’s Funds Staff
*
Included source links and/or logos serve only to further
viewer research and in no way indicates any endorsements,
sponsorships or relationships. No accuracy guarantee of their
content is implied. This information is not presented as
legal, tax or financial advice.
Reported performances of the past are not a prediction or
guarantee of future returns. |
|
January 10, 2009
|
|
Balanced vs. Freedom Funds…
Whether we’re
experiencing a bad market or just drawing near retirement,
eventually we all look for a safer place to put our money.
We’re not
just looking to protect our principal; we’d also like a fair
and reasonable return on our investment
so we often look to funds that hold a mixture of both stocks
and bonds, Balanced and Freedom Funds.
2008 was the perfect year to
tell where our money was best protected. Then comparing 2008
with a 5-Year View will tell us which funds are giving us both
the protection and the profit we are looking for.
|
Balanced
vs. Freedom Funds |
|
|
|
FREEDOM FUNDS |
2008 |
5-Year |
|
Fidelity Freedom Income |
-0.1% |
1.1% |
|
Fidelity Freedom 2000 |
-13.9% |
1.0% |
|
Fidelity Freedom 2005 |
-24.4% |
-0.2% |
|
Fidelity Freedom 2010 |
-26.3% |
-0.3% |
|
Fidelity Freedom 2015 |
-27.1% |
-0.1% |
|
Fidelity Freedom 2020 |
-32.1% |
-0.9% |
|
Fidelity Freedom 2025 |
-33.6% |
-1.1% |
|
Fidelity Freedom 2030 |
-36.9% |
-1.7% |
|
Fidelity Freedom 2035 |
-37.7% |
-1.9% |
|
Fidelity Freedom 2040 |
-38.8% |
-2.1% |
|
Fidelity Freedom 2045 |
-39.1% |
n/a** |
|
Fidelity Freedom 2050 |
-40.6% |
n/a** |
|
|
|
|
|
BALANCED FUNDS |
2008 |
5-Year |
|
Black Rock Balanced Capital |
-28.0% |
-0.5% |
|
Calvert Social Invest Balanced |
-28.9% |
-2.2% |
|
Dreyfus Lifetime Growth & Income |
-22.7% |
-0.1% |
|
Fidelity Asset Manager 50% |
-27.8% |
-1.7% |
|
Fidelity Asset Manager 70% |
-34.9% |
-3.3% |
|
Fidelity Asset Manager 20% |
-14.2% |
1.7% |
|
Fidelity Balanced |
-31.3% |
0.2% |
|
Fidelity Convertible Securities |
-47.8% |
-3.2% |
|
Fidelity Global Balanced |
-23.2% |
3.4% |
|
Fidelity Puritan |
-29.1% |
-0.4% |
|
Janus Balanced |
-15.8% |
3.8% |
|
Morgan Stanley Inst. Balanced |
-28.4% |
0.9% |
|
Oakmark Equity and Income |
-16.2% |
4.4% |
|
Van Kampen Equity and Income |
-24.8% |
0.7% |
** Fund Inception Date: June 1, 2006
The chart above
highlights the
Best 5
and the
Worst 3.
It’s
important to note that the numbers given are “annualized.” In
other words the returns given are “per year.”
No Time To Lose
Golden years tarnished as bear market mauls
target-date retirement funds
By
Jonathan Burton, Assistant Personal Finance Editor
MarketWatch.com*
SAN FRANCISCO (MarketWatch)
--
If you were expecting your target-date retirement funds to
keep your nest egg on track, you've been off target this year.
Some of these investments have saddled shareholders with stiff
losses, and probably no one feels more on edge than investors
in their 60s who intend to stop working in a couple of years.
Better make that "intended." Target-date funds
geared to a 2010 retirement had lost 27% on average for the
year through Dec. 11, according to fund-tracker Lipper Inc.
That's painful enough for someone nearing retirement, but
investors in the most aggressive of these portfolios have seen
one-third or more of their savings evaporate -- stripping the
shine off their golden years and possibly forcing them to work
longer.
Longevity risk
Target-date retirement funds have been billed as
"set-it and forget-it" investments. These one-stop shops blend
a fund company's stock and bond offerings into a single
all-purpose portfolio. Allocation to stocks and bonds is
automatically rebalanced over time, and the fund is supposed
to ratchet down risk gradually as retirement nears.
Yet a crucial shift in the design of some of these funds has
profoundly impacted investors' fortunes in the bear mark | |