A well diversified portfolio should hold many types of asset classes such as stocks, bonds, real estate, gold, bank deposits, etc. Bonds are particularly important to a portfolio that is heavy in stocks. This is because bonds can help smoothen the portfolio performance when stocks become extremely volatile or perform poorly in year. The chart …
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 …
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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” …
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 …
Continue reading ‘U.S. Stock Market Volatility Since 1928’ »
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 …