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Strategies & Market Trends : Value Investing

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To: valueminded who wrote (9435)	12/28/1999 1:06:00 PM
From: Investor2	Read Replies (1) of 78523

RE: "The fact that the averages are being held up by a few stocks is going to be a problem." That seems to be the conventional wisdom. However, the same could have been said a year ago and look what the market, as defined by the S&P 500 or a total market index fund, has done since then. Many people have made much money by merely investing in the US market as a whole. Re: "The fact that bond yields are heading up is also going to be a problem." Did you see the guest commentator on CNBC this morning? (Sorry, I didn't catch his name.) He believes that the increase in interest rates is not due to inflation concerns. Rather, it's due to the fact that people are finally realizing that bonds have been a terrible investment for the last 100 years, when compared to stocks. He stated that a quarter or half percent increase in bond yields does nothing to change the relative attractiveness of stocks, which have averaged 6% HIGHER returns for 100 years. Now, if the long term bond yield increased to 11%, bonds might might be competitive with stock returns. ---- Interesting view point. Best wishes, I2

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