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The big surprises in investments

New Dow Jones story on the website today (click here) talks about the big winners and losers in the global stock market in 2010.


Some of the highlights:


* Small-cap stocks were the sweet spot (up 25.6% on a total return basis vs. 22.5% for mid-sized and 13.8% for large stocks).


* Among the 10 big industries, basic materials led the way with a 27.3% gain. Healthcare came in last.


* Of the 114 sub-sector niches, the best-performers were precious metals producers, which skyrocketed 82%. Farming & fishing companies did the worst, dropping 23.9%,


* Eight developed countries beat the U.S. total return of 15.2%, and 21 fell short.


* Bonds are doing well for the second consecutive year. Medium-term U.S. Treasury bonds (7- to 10-year maturities) jumped 7.4% on a total return basis,


* Commodities sagged for much of the year but revived in the autumn. The agricultural sub-index is 30.3% higher for the year through Dec. 15, but is 59.1% higher than its low point in early June.


Conclusion:  "2010 was a good year for investors. But this happy situation was achieved in the same way that made 2008 a disaster--the markets ended up being highly correlated. The only difference was the direction in which they were moving.

Of course, we hear no complaints about the failure of diversification this time. Investors and markets apparently are destined to be fair-weather friends."


Comments? Questions?


-- John

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4 Replies
Senior Contributor

Re: The big surprises in investments

My interest in investments has often coincided with age or life style events.  When I was salaried, had some money and so forth I would be interested in "investments'.  As a farmer, I usually equate investments as tile lines, machinery, buildings and so forth.


i should be paying more attention to investments because the year is coming when I need to focus on retirement.  One of the reasons I keep on farming is because it seems easier than retirement.

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Re: The big surprises in investments

As long as no-till and RR seeds are working as well as they have one can farm as long as one can walk or drive.  In the future I may hire the combining done as a combine is becoming a major purchase and keeping an older model operating can be a money pit.

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Veteran Advisor

Re: The big surprises in investments "chart of the day"

The "Chart of the Day" gives an idea of how the Dow is doing in relation to how it did after past bear markets.

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Veteran Contributor

Re: My synopsis

say Mid cap / Small caps up in the 19.7 to 22.7% range ( higher on those small / mids with International exposure)


S & P gonna say up approx 9.7%.


DOW...actually only up in the 6 to 7% range.


BRIC type stocks up an avg 37.8%.


Gonna be some OK follow thru by both the S&P and DOW in 011 ( figure 10 to 12% up as actual trickle down effect from yet higher  small / mid cap earnings in 011 ).


And there's been a fair number of stocks bought 1st and 2nd quarter of 010 where the dividend is now equal to what  the original stock cost was ( just not in the USA ).


Anything with decent International sales exposure gonna continue to print higher and higher yet earnings ( don't matter where the co is from, the key is foreign sales ).



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