Other than the depression generation, I really don’t think there has been a more difficult time for individual investors than right now. In fact, even in my lifetime I’ve seen investing go from a “relatively” safe and predictable venture (good markets in the U.S. will often bring reasonable returns) to a market that can be very unpredictable and unsettling for the average investor. No longer is what markets do in the U.S. a good predictor for what markets will do elsewhere. We are now a nation of investors that must keep our eye on the international scene to truly understand where markets are going. Even with this knowledge, we can be deceived sometimes into thinking we have a handle on things, only to be kicked square in the seat by the unpredictability of it all. Case in point; the recent Euro zone loan to Spain to shore up its teetering economy. If you’ll recall, the market responded very positively to this action the day after, for awhile, and then gradually began to drift south. The Dow ended down by over 140 points that day. You ask, “What’s that all about?” So do I. I might add that the market was up the very next day, according to some reports, because of anticipated stimulus action. Who can figure, right, but this is the environment in which we strive to be successful investors today.
The complexity and mystery that comes to the market with international play is but one variable that faces today’s investor. There are a lot of other variables that didn’t seem to loom nearly so large in times past.
Joe Investor has to be asking himself these days if he is being dealt a straight hand. In other words, is the average investor really playing a game that’s fair …Read More