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TIMINGTRUTH.COM NEWSLETTER 2010-10-15
CURRENT SIGNAL TRENDS: The trend in most markets has been up of late. If the recovery continues then that trend will continue. If the recovery flounders then we will inform our subscribers in time to minimize their losses. The emerging markets are recovering especially well. The emerging market fund (VWO) we suggest is based on an index that includes common stocks of companies with headquarters located in emerging markets worldwide. The index consists of 23 countries and more than 700 securities. The fund employs an indexing approach to provide exposure to the equity markets of emerging countries in Europe, Asia, Africa and Latin America.
NEWS: There's been a lot of talk about "The Recovery" since the global economic collapse of 2007. According to the National Bureau of Economic Research the US officially emerged from the recession June 2009. However, according to the Financial Times the "recovery and repair are far from over"! Greed and selfishness produced the economic collapse and it's greed and selfishness at all levels that's hindering the full recovery. Surprised?
LONG TERM MARKET TRENDS: This is a chart of the Recovery that in hindsight started around Feb 2009. Below is a breakdown of what has happened since Feb 2009. - The Standard & Poor 500 Index which is a broad index of the 500 largest US companies is up about 58%. A fund that aims to follow the US Broad Market Index (VTI), similar to the S&P 500 Index is up 62%. (Blue and green lines)
- The global emerging markets represented by the fund VWO is up 123%! (White line)
- Large European and Pacific companies are represented by the fund VEA. It is up about 68%. (Yellow line)
- The smaller US companies ("small cap") are represented by the fund VBR and shows that smaller companies are more agile at recovering than larger companies. Their collective return was about 94% (Salmon line)
- The surprise is US real estate. The fund VNQ covers about two-thirds of the value of the entire United States real estate investment trust (REIT) market. It has outperformed all the others with 124%. (Red line)
OUR STRATEGY INSIGHTS: Our simple living investment strategy for retirement is based on just four simple principles: - Don't be greedy - think rationally, not emotionally
- Don't be in a hurry - go with the long term economic cycles
- Don't get complicated - ignore the overly complex financial hype
- Don't waste money - not acting promptly on a trend wastes money
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