From Time magazine online:
Index mutual funds trounced actively managed mutual funds last year by the widest margin in 15 years, once again raising the confounding question: Why do so many individuals gravitate to actively managed funds when they are a proven loser?
...According to the latest S&P Index Versus Active (SPIVA) scorecard:
“Over the past three years, which can be characterized by volatile market conditions, 64% of actively managed large-cap funds were outperformed by the S&P 500; 75% of mid-cap funds were outperformed by the S&P MidCap 400; and 63% of the small-cap funds were outperformed by the S&P SmallCap 600.”
It’s more of the same with foreign stock funds: 57% of global funds, 65% of international funds and 81% of emerging markets funds trailed their benchmarks.
What accounts for such steady index outperformance?
In large part, it comes down to fees....
--------
Link: http://moneyland.time.com/2012/02/24/index-funds-win-again-this-time-by-a-landslide/
Saturday, February 25, 2012
Monday, February 20, 2012
FACT: Real Unemployment 15%
From the CBO Report,
"Understanding and Responding to Persistently High Unemployment,"
first paragraph of the Summary, page 9 of the PDF report, link below:
The rate of unemployment in the United States has
exceeded 8 percent since February 2009, making the past
three years the longest stretch of high unemployment in
this country since the Great Depression.
Moreover, the Congressional Budget Office (CBO) projects that the
unemployment rate will remain above 8 percent until 2014.
The official unemployment rate
excludes those individuals who would like to work
but have not searched for a job in the past four weeks...
(and excludes) those who are working part-time
but would prefer full-time work;
if those people were counted among the unemployed,
the unemployment rate in January 2012
would have been about 15 percent.
Compounding the problem of high unemployment,
the share of unemployed people looking
for work for more than six months—referred to as the
long-term unemployed—topped 40 percent in December
2009 for the first time since 1948, when such data began
to be collected; it has remained above that level ever since.
------------------
http://www.cbo.gov/ftpdocs/127xx/doc12757/02-16-Unemployment.pdf
"Understanding and Responding to Persistently High Unemployment,"
first paragraph of the Summary, page 9 of the PDF report, link below:
The rate of unemployment in the United States has
exceeded 8 percent since February 2009, making the past
three years the longest stretch of high unemployment in
this country since the Great Depression.
Moreover, the Congressional Budget Office (CBO) projects that the
unemployment rate will remain above 8 percent until 2014.
The official unemployment rate
excludes those individuals who would like to work
but have not searched for a job in the past four weeks...
(and excludes) those who are working part-time
but would prefer full-time work;
if those people were counted among the unemployed,
the unemployment rate in January 2012
would have been about 15 percent.
Compounding the problem of high unemployment,
the share of unemployed people looking
for work for more than six months—referred to as the
long-term unemployed—topped 40 percent in December
2009 for the first time since 1948, when such data began
to be collected; it has remained above that level ever since.
------------------
http://www.cbo.gov/ftpdocs/127xx/doc12757/02-16-Unemployment.pdf
Wednesday, February 1, 2012
Update: End of January 2012
From the Wall Street Journal:
Home Prices Tumble
U.S. home prices fell again in November, according to the Standard & Poor's Case-Shiller indexes, indicating continued struggles for the beleaguered housing market.
The sector has remained sluggish despite lower prices and interest rates due to a slowly improving economy, an abundance of foreclosures and tighter mortgage requirements.
"Tighter lending standards and widespread expectations of further declines in home values have been depressing home sales on a larger scale," said economists Ellen Zentner, Aichi Amemiy and Jeffrey Greenberg of Nomura Economics Research in a note to clients. "In addition, a growing share of distressed assets in home sales that are typically sold at a 20% discount are putting downward pressure on house prices."....
------------------
Link: http://online.wsj.com/article/SB10001424052970204652904577194752102528744.html
Home Prices Tumble
U.S. home prices fell again in November, according to the Standard & Poor's Case-Shiller indexes, indicating continued struggles for the beleaguered housing market.
The sector has remained sluggish despite lower prices and interest rates due to a slowly improving economy, an abundance of foreclosures and tighter mortgage requirements.
"Tighter lending standards and widespread expectations of further declines in home values have been depressing home sales on a larger scale," said economists Ellen Zentner, Aichi Amemiy and Jeffrey Greenberg of Nomura Economics Research in a note to clients. "In addition, a growing share of distressed assets in home sales that are typically sold at a 20% discount are putting downward pressure on house prices."....
------------------
Link: http://online.wsj.com/article/SB10001424052970204652904577194752102528744.html
From Bloomberg:
Confidence Decline Points to Cooling U.S. Growth
Consumer confidence unexpectedly dropped in January and a gauge of business activity fell, underscoring forecasts that the U.S. economy will cool after expanding at the fastest pace since the second quarter 2010.
The New York-based Conference Board’s confidence index decreased to 61.1, lower than the most pessimistic forecast in a Bloomberg News survey of economists, from a revised 64.8 reading the prior month....
Employers aren’t hiring fast enough to drive bigger gains in wages and consumer spending, while higher gasoline prices are cutting into household budgets. Another report today showed home prices fell more than forecast in November, eroding the wealth of families as they seek to rebuild savings.
-----------------
Link: http://www.bloomberg.com/news/2012-01-31/consumer-confidence-in-u-s-unexpectedly-drops-on-fuel-costs-job-concerns.html
Confidence Decline Points to Cooling U.S. Growth
Consumer confidence unexpectedly dropped in January and a gauge of business activity fell, underscoring forecasts that the U.S. economy will cool after expanding at the fastest pace since the second quarter 2010.
The New York-based Conference Board’s confidence index decreased to 61.1, lower than the most pessimistic forecast in a Bloomberg News survey of economists, from a revised 64.8 reading the prior month....
Employers aren’t hiring fast enough to drive bigger gains in wages and consumer spending, while higher gasoline prices are cutting into household budgets. Another report today showed home prices fell more than forecast in November, eroding the wealth of families as they seek to rebuild savings.
-----------------
Link: http://www.bloomberg.com/news/2012-01-31/consumer-confidence-in-u-s-unexpectedly-drops-on-fuel-costs-job-concerns.html
From Politico:
Congressional Budget Office reports another $1 trillion deficit
For the fourth year in a row, Washington faces a $1 trillion-plus deficit and just servicing the nation’s debt will soon cost as much as paying for Medicaid, the federal-state health care program for the poor and disabled.
Those were two grim predictions in a 147-page report from the Congressional Budget Office, which Tuesday stepped into the 2012 campaign like some stern Aunt Cassandra — coming down from the attic to lecture the protagonists: “It’s not just the economy stupid, it’s also the debt.”
Indeed the $1.079 trillion deficit now projected for the 2012 fiscal year ending Sept. 30 is wider than what the added CBO had predicted in August, and the picture won’t substantially improve unless Congress comes to grip with changes needed in tax and spending policy.
“The CBO’s latest alarm bell couldn’t be more ominous,” said House Budget Committee Chairman Paul Ryan (R-Wis.). “For years, politicians from both political parties have failed to be honest with the American people about the size and scope of the debt threat. The CBO’s report today confirms that it is past time for serious leaders to put aside politics and start forging solutions.”.......
--------------
Link: http://www.politico.com/news/stories/0112/72205.html
Congressional Budget Office reports another $1 trillion deficit
For the fourth year in a row, Washington faces a $1 trillion-plus deficit and just servicing the nation’s debt will soon cost as much as paying for Medicaid, the federal-state health care program for the poor and disabled.
Those were two grim predictions in a 147-page report from the Congressional Budget Office, which Tuesday stepped into the 2012 campaign like some stern Aunt Cassandra — coming down from the attic to lecture the protagonists: “It’s not just the economy stupid, it’s also the debt.”
Indeed the $1.079 trillion deficit now projected for the 2012 fiscal year ending Sept. 30 is wider than what the added CBO had predicted in August, and the picture won’t substantially improve unless Congress comes to grip with changes needed in tax and spending policy.
“The CBO’s latest alarm bell couldn’t be more ominous,” said House Budget Committee Chairman Paul Ryan (R-Wis.). “For years, politicians from both political parties have failed to be honest with the American people about the size and scope of the debt threat. The CBO’s report today confirms that it is past time for serious leaders to put aside politics and start forging solutions.”.......
--------------
Link: http://www.politico.com/news/stories/0112/72205.html
Subscribe to:
Posts (Atom)