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| | Value and Opportunity Amid the Gloom | |
| By Elliott H. Gue
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If you’re feeling sick about your portfolio’s performance this year, you’re not alone. The US stock market is truly in unprecedented territory. As I noted on our financial blog At These Levels yesterday, the worst annual showing for the S&P 500 since 1927 is a 47.1 percent decline in 1931, right in the heart of The Great Depression. So far this year, the S&P 500 is down just under 49 percent; the index is on pace for its worst year ever, a staggering statistic in my view. Not surprisingly, the gloom is palpable. At the beginning of 2008, there were still plenty of pundits predicting the US would skirt recession this year or only experience a mild slowdown. Now, most are convinced the nation is in for a deep recession that will be far more painful and longstanding than the contraction in 2001 or the early 1990s. Investors are running for the hills and the safety of short-term US government bonds, as you can see in the chart below.
Source: Bloomberg This chart shows the yield on a three-month US Treasury bill over the past several years. As with all bonds, yield moves inversely with price--that is, when the price rises, the yield falls. Think you need to take costly drugs to lower your blood pressure ? Think again ! ! If you've got high blood pressure, your doctor's probably told you to take drugs to control it for the rest of your life. But not only are these medications often loaded with dangerous side effects, your average out-of-pocket cost can run as high as $1,116 a year! Now there's a safer, less costly way to drop your blood pressure to normal. Plus you're guaranteed to see results in as little as 4 to 7 weeks ! This new blood pressure breakthrough is 100% natural, yet it's NOT a supplement. It's so effective, over 90% of people who use it are able to drop their blood pressure to normal. What's more, at least 60% of those using medication to control hypertension are able to cut back on or get off drugs for good ! Find out why The Harvard Heart Letter in their December 2006 issue reports this proven therapy "has been shown to lower blood pressure as much as a first-line anti-hypertension drug" and "may be money well-spent..." It works so well, a growing number of doctors and cardiologists now recommend this therapy to patients and use it to lower their own blood pressure ! Get the full scoop on this breakthrough solution right now. It's just one click away...
The current yield on a three-month bill is 0.0101 percent, the lowest yield ever recorded. Investors have been piling into risk-free short-term US government debt since the summer of 2007 when the credit crunch first began to infect global markets. This is the clearest sign of extreme risk aversion and market panic I can imagine. There’s just not much room left on the downside for 3-month yields. | ||
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Pay Me Weekly - Value and Opportunity Amid the Gloom
