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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: J D B who wrote (6054)	5/2/2002 8:40:49 AM
From: Enigma	Read Replies (1) \| Respond to of 33421

Yes but this vast pool of money hasn't banished the type of bear market that can break peoples hearts with false rallies?

To: J D B who wrote (6054)	5/2/2002 5:30:53 PM
From: Dan Duchardt	Respond to of 33421

The self-directed money led to the seemingly irrational market activity we often see these days. No doubt it was a contributing factor, but I think it is just one among many. Perhaps self-direction was an easier target to pick off than funds in the hands of a seasoned money manager, but I don't see much evidence that managed money did any better at avoiding the hype of the investment bankers who collecting outrageous amounts of capital for pipe dreams. Perhaps what is meant by self direction is part of the issue, but as a financial layman I have entrusted fairly substantial amounts of money to professionals that is now nowhere to be found. I'm inclined to throw diversified mutual funds into that category, though I can see some might not agree with that notion. I wish I could say the professionals who managed those funds did a better job than me at handling things. Dan

To: J D B who wrote (6054)	5/7/2002 3:53:40 PM
From: John Pitera	Read Replies (1) \| Respond to of 33421

Thanks JDB, the self-directed retirement funds have contributed to creating the stock bubble. I think the biggest issue facing these millions of investors is that they need to learn the basics of sound fundamental investment. The wall street firms also need to have an attitudinal change back towards the solid fundamental groundwork of Graham and Dodd valuation metrics and also the age old wisdom of having a properly diversified portfolio. And I'm not just talking about US stock sector diversification, ie.. having a few big market cap stocks, a few biotech stocks, and a few consumer staples stocks. I'm talking about having a portfolio that includes a percentage of high quality bonds that are spread out along the yield curve in terms of duration. (I would personally not be in a lot of 30 year bonds after this summer) also having exposure to non US Dollar denominated assets and equity markets, as several of these look to have superior returns over the next few years. I've been advocating being in gold shares the past 18 months, as part of a strategy to benefit from the next Macro cycle of Reflation over the next 5 years. That cycle has much further to go. With The US Dollar set to fall on balance over the next 2 years, having a smaller percentage of funds in a few high quality foreign bonds either individually or through a fund, can give you the interest income and then possibly an additional 25% appreciation. The Investment community has mostly been failing to give us the types of investment and diversification alternatives that we've desperately needed the past 2 years. And I've found that to still be the case as I've visited with the top 5 firms and talked with several people at each place over the past month or so. It also has been wise to have been selling into rallies such as the one in the SPX in Dec and Jan where it hit it's 200 DMA once each in early Dec and then in early Jan. We don't seem to be seeing much of that type of practice advice. The Brokerage firms I've talked with seem to be in a more buy and hold mode. I amazed at what I've been seeing. John