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The 4 Biggest Investment Myths of 2008
Pessimism about the U.S. economy and financial market is so thick right now you could cut it with a knife.
I’ll be the first to admit that times are tough. But Americans have seen tough times before. And we have always prevailed.
Too many investment myths have gone unchallenged lately. Today I plan to refute them – and explain why financial markets are likely to perform much better than most investors believe in the year ahead.
Let’s begin by examining the four biggest investment myths circulating right now…
Investment Myth #1: The Era of Free Markets is Over
It’s true that many of the apostles…
30Dec2008 | Investment U | 0 comments | ContinuedIn the Long Run, the Dow’s 40% Nosedive May Actually Turn Into a Safe Landing
By Martin Hutchinson
Money Morning
With the near-record 678-point plunge yesterday (Thursday), the Dow Jones Industrial Average has plunged from its all-time-record high of 14,280 to below 8,600 in just one year’s time. To those accustomed to a five-figure Dow, this 40% freefall represents the unexpected descent of the stock market into a gigantic pit that signifies the dawn of the second Great Depression and an end to the free market system.
However, for those of us who believe in fundamental stock-market valuation, the outlook isn’t dire at all – indeed, the stock market’s long-term outlook is as upbeat as it’s been for…
13Oct2008 | Money Morning | Comments Off | ContinuedHow Complex Securities, Wall Street Protectionism and Myopic Regulation Caused a Near-Meltdown of the U.S. Banking System
There’s no time to beat around the bush. Let’s flush out the three credit-crisis catalysts that have remained hidden for too long, thanks to Wall Street protectionism and myopic regulation. Those catalysts – which brought us to the brink of a financial meltdown – are structured collateralized debt obligations, credit default swaps, and the horrific offspring of the two – credit default swaps on structured collateralized debt obligations.
An asset-backed security (ABS) is a type of tradable debt security that’s derived from a pool of underlying assets. We could be talking about a pool of mortgages, of automobile leases, or loans…
24Sep2008 | Money Morning | Comments Off | ContinuedThe Pin in the Monetary Hand Grenade
First, a quick look at the markets. The Dow rose 185 points yesterday, continuing its rally. Oil gained $4 too – and is now trading at $126.
Gold dropped $13 and seems ready to fall below $900. We wondered if we would ever again see gold below $900. Looks like the answer is ‘yes.’
Yesterday, George W. Bush signed the housing bill – in which up to $300 billion is to be spent bailing out naïve homeowners, caddish mortgage lenders and Wall Street geniuses. It is packaged as a reserve against catastrophe. If everything is hunky dory from here on, only a…
1Aug2008 | Daily Reckoning | Comments Off | Continued
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