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DHWA Investment Update | 2010 Vol. #2 |
What A Difference A Year Makes |
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What a difference one year makes! One year ago today, the Dow Jones Industrial Average sat at 6547.05 and was down 53% from its high, yet we were greeted that morning by a Wall Street Journal Article with the blaring headline, "Dow 5000? A Bearish Possibility" which trumpeted the opinion that we could fall by an additional 25%! We remember all too well how miserable a time it was, but that fateful day actually turned out to be the bottom of the market. As you've heard multiple times recently, we have seen markets rebound dramatically. Since its close on March 9, 2009, the Dow is back above 10,500, representing a gain of 61%. The S&P 500 and the NASDAQ have posted gains over the same period of 68% and 84%, respectively. Yes, we still have quite a bit of ground to cover to make it back to the 2007 highs as well as multiple economic and political challenges to overcome, but once again, we have seen the resiliency of the stock markets. Yahoo Finance recently ran an article giving details of the past year. Click here to read it. One thing that jumped out at us? Inflows into stock funds are being dwarfed by the inflows into bond funds i.e. people selling out of stocks near the lows and buying bonds near the highs. As you've heard us say too many times, this is why we stay invested in our well-diversified portfolios. As we always do, we are continually monitoring and re-evaluating the holdings in your investment models and with the outlook for interest rates and bonds changing, we may be looking to make some rebalancing moves in the near future. March 9, 2010 certainly is a much more beautiful day weather wise and market wise than a mere year ago! Let's enjoy them both and hope for a bright longer term future ahead. Sincerely, |