Weekly Commentary
June 21, 2010
The
Markets
A
hypothetical Doctor of Investments might say we are in an "EKG
market."
We've
experienced a series of headlines that have sent the market on a yo-yo ride
since we dropped the New Year's ball in Times Square
six months ago. Here are a few of the eye-raising events that have kept
investors on an emotional rollercoaster:
The S&P 500 index rose 15.2% between
February 8 and April 23, according to data from Yahoo! Finance.
Unfortunately, investor sentiment quickly turned and the index declined
13.7% between April 23 and June 7, according to data from Yahoo! Finance.
On May 6, the "flash crash" sent
the Dow Jones Industrial Average to an intra-day loss of nearly 1,000
points before making a massive recovery to end the day down
"only" 348 points, according to Portfolio.com. At one point
during the day, the Dow dropped 481 points in 6 minutes and then jumped
502 points just 10 minutes later.
An April 20 explosion on a drilling rig sent
as much as 60,000 barrels of oil a day flowing into the Gulf of Mexico
making it the worst oil spill in American history, according to The New York Times on June 18.
A sovereign debt crisis in Europe sent
shivers through world markets and led the European Union to unveil a
nearly $1 trillion loan package designed to backstop weak countries from
defaulting, according to The Wall
Street Journal on May 10.
Gold prices hit an all-time high of $1,258
per ounce on June 18, "fueled by sovereign risk in the euro zone,
historically low interest rates, and concern over the stability of paper
currencies," according to CNBC on June 18.
Pop
quiz time. After all these headline-grabbing events, in percentage terms, how
much do you think the S&P 500 index has gone up or down since the end of
last year? Brace yourself. The index has risen a whopping 0.2% between December
31, 2009 and last Friday.
The
up-down EKG between the bulls and the bears has, like the U.S. versus Slovenia in the World Cup, ended in
a draw. However, unlike the U.S.
versus Slovenia,
we still have six months left in this year to see who wins the yearly
"Investment Cup."
|
Data
as of 6/18/10
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
| |
Standard
& Poor's 500 (Domestic Stocks)
|
2.4%
|
0.2%
|
21.3%
|
-10.0%
|
-1.7%
|
-2.8%
| |
DJ Global ex
US (Foreign Stocks)
|
4.0
|
-6.8
|
16.1
|
-11.4
|
2.2
|
0.5
| |
10-year
Treasury Note (Yield Only)
|
3.2
|
N/A
|
3.8
|
5.1
|
4.1
|
6.0
| |
Gold (per
ounce)
|
3.0
|
13.8
|
33.5
|
24.2
|
23.4
|
16.0
| |
DJ-UBS
Commodity Index
|
2.7
|
-7.7
|
1.7
|
-10.0
|
-4.5
|
2.2
| |
DJ Equity
All REIT TR Index
|
2.4
|
15.1
|
70.3
|
-7.1
|
2.0
|
11.0
|
Notes: S&P
500, DJ Global ex US, Gold, DJ-UBS Commodity Index returns exclude reinvested
dividends (gold does not pay a dividend) and the three-, five-, and 10-year
returns are annualized; the DJ Equity All REIT TR Index does include reinvested
dividends and the three-, five-, and 10-year returns are annualized; and the
10-year Treasury Note is simply the yield at the close of the day on each of
the historical time periods.
Sources: Yahoo!
Finance, Barron's, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of
future results. Indices are unmanaged
and cannot be invested into directly. N/A means not applicable or not available.
HELEN REDDY
PROCLAIMED,"I
am woman, hear me roar. In numbers too big to ignore," back in the early
1970s. Today, those words are coming true in education, the workplace, and on
Wall Street.
In an
article titled, "The End of Men" in the July/August 2010 issue of Atlantic Magazine, author Hanna Rosin
reported some little known statistics about how far women have come in today's
society. How many of these were you aware of? -
As
of earlier this year, women now outnumber men in the U.S. workforce for the
first time ever.
- Even
though women outnumber men in the workforce, three-quarters of the jobs lost in
this recession were lost by men.
-
Thirteen
of the 15 job categories projected to grow the fastest over the next decade are
staffed primarily by women.
-
Women
now hold more than 50% of managerial and professional jobs, according to the
Bureau of Labor Statistics.
-
According
to Rosin, women now earn 60% of master's degrees, about 60% of all bachelor's
degrees, about half of all law and medical degrees, and 42% of all MBAs.
-
A
2008 study by researchers at Columbia Business School and the University of
Maryland looked at the top 1,500 U.S. companies from 1992 to 2006 and
discovered that firms that had women in top positions performed better.
The
rising level of women's educational attainment and workplace prominence will
have a profound impact on the business and investment spheres in the years to
come. As part of our "find a trend and throw yourself in front of it"
philosophy, we will continue to monitor this long-term trend and the ensuing
investment implications.
Weekly
Focus - Think About It
"I
shut my eyes in order to see."
--Paul
Gauguin
|
