Strategy
Impact of Foreign Direct Investment on Equity Markets of BRIC Countries
Emerging market equities did not perform well last year compared to years before. For example, the the benchmark indices of BRIC countries were down by double digits in 2011 with India’s Sensex being the worst performer losing 24.5%. Russia’s RTS, Brazil’s Bovespa and the Shanghai Composite Index were off 22.0%, 18.1% and 21.7% respectively. One [...]
The Role of Bonds in a Stock Portfolio
Bonds should be an integral part of a well diversified portfolio.While stocks in general stocks offer higher growth than bonds, investors should not ignore the value of holding bonds as an asset class. For the period from 2000 to 2010, the S&P 500 was basically flat leading many to call it as the “lost decade” [...]
U.S. Stock Market Volatility Since 1928
Volatility in the U.S. stock market has been extreme in the past few years. The following chart shows the 5-year chart for the VIX index: Click to enlarge Source: Yahoo Finance After peaking in late 2008, the fear index started to moderate until the middle of this year after which it has spiked again due [...]
Why Invest During Low Growth Markets
At the beginning of this year the S&P 500 index stood at 1257. Over the last 10 months the index has experienced extreme volatility and closed today at 1,251. Similarly the index started at 1,320 in the year 2001 which is higher than where it ended today. Hence some investors may have the following question in [...]
One More Proof That Investors Should Not Time The Market
I wrote a post back in September about why ordinary investors should not time the market. This post adds another angle to the same topic. The first decade of the 21st century has been called as “The Lost Decade” for U.S. stocks as they were flat to down. In addition, the S&P 500 lost 23% [...]
Historic U.S. Asset Classes Return Over Different Periods
Recently I came across an article titled “Buy, hold, regret” in the Buttonwood blog of The Economist. The main gist of the article was that the buy-and-hold theory does not work in all countries. From the article: IT IS a truth universally acknowledged that equities outperform over the long term, so that the best strategy [...]
