Les; You have the picture, and it's not the one normally painted
on SI, or by the news pundits.
I suspected the picture of riches in the market was grossly over
stated all along.
Something I don't talk about very much and refuse to prove
( because it would cause big problems ) is that I was able
to peak at thousands of accounts of people who traded stocks instead
of mutual funds and the results you gave on the funds was
better than they did, in fact just about 85% of the stock
pickers I looked at loss money.
Most brokers know this already but won't talk about it, and is
one reason they try to steer people into mutual funds.
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All the adds you see hold the winners up to the light, and you
read about the best 25 or 100 funds and such, but the thousands
of funds that don't do crap are sort of down played , and or
they pick windows in time to shine a more favorable light on them,
many of them would have done OK for the longer term invested,
however there are not all that many people who will or CAN
sit through a real bad down turn.
In 87 many people just had to sell, the job market went to hell
and car payments, and house notes all had to still be paid,
so they took their losses on the stocks, and tried to pay
on going bills; so forget those fancy
adds that show a bunch of lolly pop middle class people
who sat it out in 87, and are now rich as that crap is for the
birds.
The ones I know who had something on the ball, ( most
even lost their homes ) but they came back not thanks to
investments in the market but because they had the talent and
fortitude to find new jobs and the over all economy improved.
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The market gurus are given every one a snow job, as that's the
way they make money..now they have JP6 all jazzed up and
newbies are flooding the gates..but the same thing will play
out, 15% may do OK , the other 85% are going to get took
to the cleaners.
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The odds are not so bad if one never puts any money in the
market he will need to live on in the next 5 years even if
he were to lose his job.
We know the S&P500 is actully an enhanced index as are most
others, tossing out the dogs and bringing in new runners.
But take a real good look at the broader market,
quote.yahoo.com^NYA&d=1ys
you see the high last year in July, well we are only 22pts above
that right now..and could lose that in the next month..
The point is every one has been fed a line of crap by the
so called experts and they really believe the Market has jumped
over the moon..BUT the broad market is having a hard time
hanging onto a 3% gain since last July..and it may not make
it. And why ? well that index is not adjusted for the
Dollar index and the Dollar was higher last July than it is
now..the gains made were a slight of hand, measured from the
lows in Sept and Oct..and were mostly made when the dollar went
to hell in a hand basket. Now that the dollar is crawling out
of the gutter we are faced with a new set of problems..
The trade deficit has to go up so we are back to square one,
and in the same dilemma we were almost a year ago, but this
time it could be worse.
-------------------------
Jim
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