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Mutual Funds Have Little Place in a Portfolio: Bogle
rbc weekly commentaries Market Week: January 14, 2013 The Markets
Equities didn't match the prior week's fireworks, but they still posted gains in the new year's second week. The S&P 500 hit a five-year high for the second week in a row. However, the Global Dow soundly beat all four domestic indices for the week, in part because of encouraging retail sales in Europe.
Equities data reflect price changes, not total return.
Last Week's Headlines
President Obama nominated White House chief of staff Jacob Lew to replace Timothy Geithner as Secretary of the Treasury. Increased imports of consumer goods such as smart phones were a key factor in widening the trade deficit in November. Exports also rose, but not by as much, according to the Commerce Department. As a result, the trade deficit rose 16% to $48.7 billion. Ten mortgage servicers agreed to pay $8.5 billion to help resolve mortgage foreclosures that have been under review for faulty processing. The agreement, which will provide $5.2 billion in mortgage assistance and $3.3 billion in direct payments to borrowers, will bring to an end the case-by-case review of faulty foreclosures. In addition to participating in the settlement, Bank of America agreed to pay $10 billion to Fannie Mae to resolve allegations of faulty processing. Eurozone unemployment hit a new record of 11.8% in November as 113,000 workers lost their jobs. However, European retail sales were up for the first time since July. The Federal Reserve turned over to the U.S. Treasury almost $77 billion in profits from its 2012 quantitative easing efforts. The interest on Treasury bonds and mortgage-backed securities provided the Treasury's second highest windfall from the Fed, behind only 2010's $79 billion. After its deliberations were made public, insurer American International Group (AIG) decided not to join a $25 billion lawsuit filed by former CEO Maurice Greenberg and other shareholders against the U.S. Treasury. That suit claims that the terms of the Treasury's $182 billion bailout of AIG, which has since been repaid, were too onerous.
Eye on the Week Ahead
Earnings reports, particularly those from key financial institutions, will join inflation, retail, and housing data as grist for investor decisions.
Key dates and data releases: wholesale inflation, retail sales, business inventories, Empire State manufacturing survey (1/15); consumer inflation, industrial production, Fed "beige book" report, international capital flows (1/16); housing starts, Philly Fed manufacturing survey (1/17).
From the "feels like 2007 all over again". Is this not a most wonderful statement from one the folks who think they are guiding the monetary planet into the zone of fulfillment?
Esther George, the president of the Kansas City Fed and this year a voting member on the Fed’s rate-setting committee, the FOMC, delivered a speech last week in Kansas City in which she specifically addressed the Fed’s role in skewing investor attitudes, and the possible consequences:
A long period of unusually low interest rates is changing investors’ behavior and is reshaping the products and the asset mix of financial institutions. Investors of all profiles are driven to reach for yield, which can create financial distortions if risk is masked or imperfectly measured, and can encourage risks to concentrate in unexpected corners of the economy and financial system. Companies and financial institutions, such as insurance companies and pension funds, and individual savers who traditionally invest in long-term safe assets, are facing challenges earning reasonable returns, and so they may reach for yield by taking on more risk and reallocating resources to earn higher returns. The push toward increased risk-taking is the intention of such policy, but the longer-term consequences are not well understood.
How much would I be charged to obtain such enlightened advice from a professional in the field of economics? Priceless thinking apparently....,guess I should find out whether the FOMC is able to accept PayPal.
We investors are among a very large fleet of various ships and captains; attempting to not become rammed upon the seas of high investing; by one of the others in the very largest of the ships that is named: The Greater Fool.
Yer gonna need more than charts, graphs and fundamental studies to ply through this armada of fools.
Bad title by CNBC editor. Bogle did not claim mutual funds have no place in portfolio. He favors index mutual funds and says active funds have no place. Some idiot takes it as Bogle is against all mutual funds. Far from truth.
Comments
http://www.minyanville.com/trading-and-investing/fixed-income/articles/Two-Warning-Signs-For-Treasuries-us/1/14/2013/id/47292
rbc weekly commentaries
Market Week: January 14, 2013
The Markets
Equities didn't match the prior week's fireworks, but they still posted gains in the new year's second week. The S&P 500 hit a five-year high for the second week in a row. However, the Global Dow soundly beat all four domestic indices for the week, in part because of encouraging retail sales in Europe.
Market/Index 2012 Close Prior Week As of 1/11 Week Change YTD Change
DJIA 13104.14 13435.21 13488.43 .40% 2.93%
Nasdaq 3019.51 3101.66 3125.63 .77% 3.51%
S&P 500 1426.19 1466.47 1472.05 .38% 3.22%
Russell 2000 849.35 879.15 880.77 .18% 3.70%
Global Dow 1995.96 2051.22 2075.84 1.20% 4.00%
Fed. Funds .25% .25% .25% 0 bps 0 bps
10-year Treasuries 1.78% 1.93% 1.89% -4 bps 11 bps
Equities data reflect price changes, not total return.
Last Week's Headlines
President Obama nominated White House chief of staff Jacob Lew to replace Timothy Geithner as Secretary of the Treasury.
Increased imports of consumer goods such as smart phones were a key factor in widening the trade deficit in November. Exports also rose, but not by as much, according to the Commerce Department. As a result, the trade deficit rose 16% to $48.7 billion.
Ten mortgage servicers agreed to pay $8.5 billion to help resolve mortgage foreclosures that have been under review for faulty processing. The agreement, which will provide $5.2 billion in mortgage assistance and $3.3 billion in direct payments to borrowers, will bring to an end the case-by-case review of faulty foreclosures. In addition to participating in the settlement, Bank of America agreed to pay $10 billion to Fannie Mae to resolve allegations of faulty processing.
Eurozone unemployment hit a new record of 11.8% in November as 113,000 workers lost their jobs. However, European retail sales were up for the first time since July.
The Federal Reserve turned over to the U.S. Treasury almost $77 billion in profits from its 2012 quantitative easing efforts. The interest on Treasury bonds and mortgage-backed securities provided the Treasury's second highest windfall from the Fed, behind only 2010's $79 billion.
After its deliberations were made public, insurer American International Group (AIG) decided not to join a $25 billion lawsuit filed by former CEO Maurice Greenberg and other shareholders against the U.S. Treasury. That suit claims that the terms of the Treasury's $182 billion bailout of AIG, which has since been repaid, were too onerous.
Eye on the Week Ahead
Earnings reports, particularly those from key financial institutions, will join inflation, retail, and housing data as grist for investor decisions.
Key dates and data releases: wholesale inflation, retail sales, business inventories, Empire State manufacturing survey (1/15); consumer inflation, industrial production, Fed "beige book" report, international capital flows (1/16); housing starts, Philly Fed manufacturing survey (1/17).
Is this not a most wonderful statement from one the folks who think they are guiding the monetary planet into the zone of fulfillment?
Esther George, the president of the Kansas City Fed and this year a voting member on the Fed’s rate-setting committee, the FOMC, delivered a speech last week in Kansas City in which she specifically addressed the Fed’s role in skewing investor attitudes, and the possible consequences:
How much would I be charged to obtain such enlightened advice from a professional in the field of economics? Priceless thinking apparently....,guess I should find out whether the FOMC is able to accept PayPal.
We investors are among a very large fleet of various ships and captains; attempting to not become rammed upon the seas of high investing; by one of the others in the very largest of the ships that is named: The Greater Fool.
Yer gonna need more than charts, graphs and fundamental studies to ply through this armada of fools.
Regards,
Catch
With each fiscal hiccup there will be a "flight to safety"... regardless of interest rates. Own EDV or BTTRX as a remedy to the hiccups.