The Week: Most Recent investing

The 'epic' bull market: Why are investors shunning stocks?

The Week — Mon, 12 Mar 2012 15:31:00 -0400

In March 2009, in the midst of the financial crisis, the Dow hit a historic low, falling to levels not seen since 1996 — or 1966 if you take inflation into account. But in the three years since, the stock market has been on an "epic bull run," gaining more than 100 percent in value, says Roben Farzad at Bloomberg Businessweek. Yet lots of investors are still standing on the sidelines — trading volume on the New York Stock Exchange is at its lowest level since 1999. Why? Here, a guide to America's stock market skittishness:

Where are people investing their money?
In the past three years...

The stock market's 'melt up': Will the rally end painfully?

The Week — Tue, 24 Jan 2012 13:24:00 -0500

Even as European economies flirt with disaster, the U.S. stock market is proving "surprisingly buoyant." The Dow Jones Industrial Average has risen by 19 percent since October, a "melt up" that some market analysts say defies logic, given that the global economic outlook is rather grim and the American economy has yet to make a clear recovery. Do American investors see bright spots others are missing, or are they walking blindly off a cliff?

A disaster is brewing: The European Central Bank is buying massive amounts of bonds, says Michael Sivy at TIME, to prevent interest rates from rising and crushing...

Is investing in stocks too frighteningly risky?

The Week — Thu, 29 Sep 2011 14:41:00 -0400

The stock market has been alarmingly volatile lately, rising by hundreds of points one day only to fall sharply the next. The looming debt crisis in Europe is largely to blame — and the fear that Greece and other struggling governments will default on their loan payments has already scared many investors away from stocks and toward the relative safety of U.S. government bonds. Is it time for smart investors get out of stocks altogether?

Yes. Investors need shelter from the coming crash: One way to measure the value of the stock market is to compare it to the size of the economy as a whole...

Global market meltdown: Are stocks going to crash?

The Week — Fri, 23 Sep 2011 12:20:00 -0400

Finance ministers from the world's leading economies are pledging to do whatever it takes to keep banks from failing and financial markets from crashing, but global stocks continued to head down Friday after Thursday's massive plunge. Markets in many foreign nations have already entered bear market territory — defined as a 20 percent drop from their peak. U.S. stocks aren't quite there, but many investors fear the worst is yet to come as worries of another global recession build. Is this a crash in the making, or should smart investors just sit tight?

The "perfect economic storm" is about...

The stock market's history of September swoons: By the numbers

The Week — Wed, 07 Sep 2011 11:47:00 -0400

Historically, the stock market performs most miserably in September (no one is quite sure why), and this month doesn't seem likely to reverse the annual trend. The S&P 500 drooped 3 percent last Thursday and Friday — the first two days of the month — and slipped another 0.7 percent Tuesday. "If history is any guide, for it's never gospel, we may be in for another rough ride," says Standard & Poors' Sam Stovall. Here, a brief guide, by the numbers, to the dreaded September swoon:

0.8
Average percentage that the S&P 500 has lost each September, from 1950...

Are stocks really a bargain right now?

The Week — Mon, 15 Aug 2011 11:32:00 -0400

Last week, the Dow Jones industrial average swung like a violent pendulum, gaining or losing hundreds of points by the day. As of Monday morning, stocks are on the rise, thanks, in part, to unexpectedly positive news about Japan's economic growth. Still, given the market's volatility of late, analysts can't decided if investors should go on a bargain-hunting buying spree or stuff the money under the mattress. Is now really a good time to buy?

Yes, stocks are trading below earnings: It's still a great time to buy, says Andrew Bary at Barron's. Sure, "stocks went on an extraordinary ride last week...

The Dow roller coaster: When will it stop?

The Week — Fri, 12 Aug 2011 12:06:00 -0400

On Monday, the Dow Jones Industrial Average plunged 634 points. On Tuesday, it skyrocketed 429 points. On Wednesday, it took another dive — this time, a 519-point drop. And on Thursday, the Dow rallied to climb 431 points. Never before in the Dow's history has the market seen four straight days of 400+ point swings. In trading Friday morning, the Dow was up triple digits again. How much longer will this roller coaster go on?

Expect market volatility until Western economies improve: "We are going to continue to be in a choppy period with these big swings" for some time, says Margaret Patel...

Stephen Colbert's evisceration of the New York Post's Dow cover

The Week — Thu, 11 Aug 2011 15:34:00 -0400

The video: On Wednesday, the New York Post blindly applied its trademark saucy headline treatment to the recent stock market turmoil. The nonsensical result — "Crazy stox like a hooker's drawers…UP, DOWN, UP" — quickly drew a chorus of media ridicule led by Stephen Colbert . (Watch the video below.) "This is analysis that everyone can understand," Colbert joked on his Comedy Central show , before pointing out that a hooker's clients generally prefer her panties to be down and testing out the Post's strange analogy on other big news stories, including the...

The stock market's frightening volatility: Is it 2008 all over again?

The Week — Tue, 09 Aug 2011 12:28:00 -0400

On Monday, the Dow Jones Industrial Average took a 635-point nosedive, capping a wave of frenzied selloffs fueled, at least in part, by S&P's downgrade of America's credit rating, and growing worries about the state of the economy. The Dow's sharp drop was the steepest one-day decline since the financial crisis nearly three years ago. And yet, by midday Tuesday, the Dow had climbed 200 points. Are we reliving the wild ups and downs of 2008?

No. The cause of this crisis is different: "Market turbulence alone isn't enough to prove that history repeats itself," says Francesco Guerrera in The...

The Dow's 'scary' collapse: 6 theories

The Week — Fri, 05 Aug 2011 09:34:00 -0400

Financial markets sank around the world early Friday after U.S. stocks went into a "scary" nosedive on Thursday, with the Dow Jones Industrial Average falling by 513 points. It was the biggest percentage drop — the Dow was down 4.3 percent, the Standard & Poor's 500 index fell 4.8 percent, and the Nasdaq 5.1 percent — since the dark days of the 2008 financial crisis. What caused the collapse? Here are six possible culprits:

1. Wall Street hates the debt deal
The plunge Thursday capped a 10-day slump, says Stephen Gandel at TIME, that started when it became clear that Washington was...

Why women are better investors

The Week — Fri, 17 Jun 2011 10:54:00 -0400

Wall Street is often thought of as a world dominated by wealthy men in suits. But a new study from Barclays Wealth and Ledbury Research has found that female investors are more likely to make money in the market. Here, a brief guide to the findings:

What exactly did the study find?
That women wring more profit out of the financial markets because they take fewer risks as investors. They tend to buy and hold, and avoid risky, anxiety-producing investments and frequent trading. This more conservative approach pays off in the long run. Relatively speaking, women excel at self-control, the study says...

Sell low, buy high: Are investors being stupid again?

The Week — Wed, 23 Feb 2011 10:46:00 -0500

It's the oldest advice in the markets: Buy low, sell high, says Carl Richards in The New York Times. But investors always seem to get it backwards, and "we're doing it again" right now. Mutual fund investors, spooked by the sour economy, pulled money out of the markets in 2008, 2009, and 2010. "Then, in January, someone hit a switch," and people started buying again. The trouble is, by that time the market had already posted "big gains," sharply limiting the money these people stood to make. It's unwise, says Richards, but understandable. Here, an excerpt:

Unfortunately, we’re hardwired...

Will the Dow tumble in September?

The Week — Wed, 01 Sep 2010 12:23:00 -0400

Stocks have been sliding for months and historical patterns don't bode well. September is typically the worst month of the year for stocks. The month often starts strong — as this one did, with a Wednesday surge — then reverses course as mutual fund managers sell winners to bank quick profits, and weed out the losers in their portfolios before the final quarter of the year begins. And with the economy weakening and home sales plunging, investors already have itchy fingers poised over the sell button. Will the stock market take a dive this month? (Watch a Bloomberg discussion about the...

Why Americans are ditching the stock market

The Week — Mon, 23 Aug 2010 12:40:00 -0400

A flurry of bad economic news sent investors rushing out of the stock market and into bonds last week, accelerating a trend that began months ago as evidence began accumulating that the economic recovery is faltering. Some analysts say this is just a predictable short-term reaction to bad news; others say it is the beginning of a long fall for equities as the weak economy causes people to move more of their money into government bonds. Have Americans lost their stomach for the stock market? (Watch a report about the declining market)

Yes, the recession damaged our faith in stocks: Wary investors...

The 'Hindenburg Omen': Prelude to a stock market crash?

The Week — Thu, 19 Aug 2010 08:45:00 -0400

The so-called Hindenburg Omen, an obscure technical indicator that purportedly precedes market crashes, has some Wall Street analysts and investors very jittery. All the conditions for the omen were reportedly met last Thursday — and if it repeats in 36 days, the odds of a really big market crash jump considerably, according to believers. What are the chances the omen — named after the German zeppelin that flamed out over New Jersey in 1937 — is signaling a similar crash-and-burn for U.S. stocks? (Watch Glenn Beck warn about the omen)

The "Hindenburg Omen" is bunk: You can't...

Could the Dow plunge to 1,000?

The Week — Tue, 06 Jul 2010 10:07:00 -0400

Market forecaster Robert Prechter says we're on the verge of the biggest market crash since the 1720 collapse of Britain's South Sea Bubble, with the Dow nosediving to below 1,000 in the next five to six years, from around 10,000 now. Prechter, regarded as a powerful market "guru" in the late 1980s, relies on an esoteric technical-analysis tool that uses past market movements to predict future ones. "If I'm right, it will be such a shock that people will be telling their grandkids many years from now, 'Don't touch stocks,'" he says. How seriously should we take the warning?

What's an amateur to...