"Greatness is not an act... but a habit.Greatness is not an act... but a habit." -Greg Jennings
You always have to be cognizant of the quality of any reported profits. Many companies achieve profits through accounting. There has been a lot of that recently.
It seems there are isolated pockets in the economy that are doing well, but overall it is unclear how healthy the economy really is. Much like real estate. In some areas prices seem to be recovering slightly, in other areas not so much. One resulting of tapering is likely to be an increase in mortgage rates, which could foster a decline in prices and/or slow down in sales.
Many investors are scarred of the stock market right now, with the experience of losing a lot of money just a few years ago. Many have sat on the sidelines during the last couple years, when good returns were relatively easy to achieve. Many who have gotten back into the market are leery of any change in the economy, and will sell because of a change without knowing if its good or bad. In short, there was some panic selling just because of the announcement. Panic selling means a decline in prices.
Buying an index fund is like saying I want to make slightly less than market returns. Either buy stocks or mutual funds whose managers have a history of getting higher than market returns after fee's.
As an aside once gold goes to 1250 I will start a small holding. I sold in July 2011 and prices are looking tempting.
Canadian REITs just went on sale and have attractive yields.
Last edited by Upnorth; 06-22-2013 at 10:38 AM.
That's the problem with index funds. My goal is to do better than the market as a whole. You can do that with market segment funds, but only if you know the segment very well.
I did fairly well with some US REITS the past year or so. while their dividends are still appealing, their prices have stagnated the last month or two, so I sold all of mine. If their prices decline, the nice dividend returns are eaten up quickly.
Gold does look like it could be an opportunity, doesn't it?