House Prices – Chart
Contrary to the popular belief, house prices do come down. Check out this historical chart (from '88 to '06), from NY Times.
Sell in May, Buy Back in November
There was an interesting observation in the S&P Outlook recently. Since 1945, in the period from November-April, the S&P 500 returned 7.19%; in the May-October period, just 1.6%. What do do? Sell in May, and Buy back in November! I think this is true this year. I feel like we’re due for a correction. It might be a good time now, especially after the recent records. They recommend doing the following. For May-October overweigh- consumer staples- health care For November – April overweigh- financials- industrials- materials- consumer discretionary- information technology Now that’s an interesting observation… Here's a chart that breaks the returns by month, averaged since 1950.
Investing in ETFs
ETFs are great. They allow you to buy the whole index of stocks with one purchase. I have always like them. But these days, there are new ETFs coming daily. Where should you invest? John Bogle, featured in Barron's has some good advice, I think.Q: Let's say an individual has a million dollars to spend in constructing a stock and bond portfolio with ETFs. What kind of ETFs would you recommend their using?A: First off, we expect that investors should talk with their financial advisers about their particular needs. The basic strategy that we see people using is buying the broad benchmark, so perhaps the Russell 3000 Index Fund (ticker: ) and the MSCI EAFE Index Fund (), which gives you exposure to all the developed non-U.S. markets such as…
Must-Have Web Resources
A great set of links on various topics related to investing. Check it out and select the ones you like. I'm sure you'll find something for you.ReferenceThe Investor's Toolset: 57 Must-Have Web Resources, Ask The Advisor blog (excellent blog, BTW)
Reacting to Market Declines
Excellent and thorough article on a basic, fundamental truth. It's something that I deeply believe in: investing is for the long term. If you think you can time the market, you might get burned out, especially now. But if you can invest for the long term, for at least five years, you'll do well. Simple as that.ReferenceReacting to Market Declines: The Case for Staying Invested, Fidelity Investor's Weekly Newsletter (very good newsletter, btw)
Subprime Meltdown
I'm kicking myself a bit. How come I did not know about the subprime lenders before?! I had been talking about a housing downturn for some time now. However, till last couple of weeks, when the meltdown actually began, I did not know that there were lenders that were doing subprime lending only. Had I known, I would have shorted New Centrury (, almost bankrupt, from $30), Accredited (), Novastar ( and Fremont ().Either way, shorting is very risky. I tried shorting Countrywide (), but I only did it for a day. I chickened out after I read a favorable report on the stock. Countrywide, even though it has the biggest exposure to subprime, is a sound company. Plus, it's already down a lot.Housing downturn has only begun. I am…
Vanguard mutual funds that look good to me
I like Vanguard as a company. I have been with them for a couple of years now. I like what they offer: both, in terms of fund selection, and in terms of the services they offer.Why would I want to invest in Vanguard funds? First, they give you a good selection. And second, you can put your investments on auto pilot: you can actually do dollar-cost averaging at no cost!So far, I have invested in 2 funds at Vanguard (NJ Tax-Free Fund; and S&P Index Fund). Every month, $50 gets automatically invested into each of them from my bank account. I really like that.The downside? There is usually a $3K minimum investment for each of the funds. (It would be great if it was $1K.)I am planning to shift some…
Little reshuffling
I think I'm going to do a little re-shuffling in my portfolio soon. (I will create a post of my current holdings soon).Potential Sells has been dropping lately. I have to look at the Value Line report for it. I might sell it. has not moved much. I'm up only 2% on it. I might consider unloading it and use the money for something else.Walgreen is another stock I'm not sure about. It's a stock that analysts love (it's got the highest Value Line rating for safety and for timeliness). I'm up on it but I'm not too sure about the stock.Potential BuysI am bullish on the following countries: Brazil, Mexico, Canada, and Australia. Especially Brazil. Granted I don't know much about these countries, except that they have been growing…
My Feb 2007 Stocks and ETFs
Here are my current holdings in the beginning of 2007. My strategy now is still go with a defensive lineup and also diversify more internationally. I also decreased my position in energy. I'm going to stick to my strategy and even increase my exposure to ETFs and opt for less risk than investing in individual stocks.: $68: A giant that's beaten up a bit. Should recover. Quality stock..: $36: Quality company with good management. Diversified. Looks cheap.: My recent addition. Company makes good products, moves into more healthy oriented products. Good international player.: Panasonic makes the best plasmas and cameras. Good growth potential.: It's beaten down now but a quality company with very good growth potential.: One of the biggest and beaten down. Good pipeline.: I believe content is the…
Current State of the Housing Market
Is is a good time to buy now?I don't think so. It's going to take a lot longer for this market to finally settle down. It's going to be up and down for some time.The housing market will settle down and might start going up sometime in 2008 -- I'm not the only one that thinks like that, a lot of economists have the same view. Why so long? It was an up market for a long time, 1998 - 2005. It's going to take a long time come down."It may not be until 2008 until the market bottoms out," predicted James Hughes, dean of the Bloustein School of Planning and Public Policy at Rutgers University.The problem, Hughes said, is the "extraordinary gains" in the market played out over seven…