Fear and uncertainty surrounding the subprime-driven lending crisis sparked continued market volatility in August. Stocks began the month by rebounding from the sharp sell-off that marked the second half of July, before experiencing another round of sharp declines. Fed moves to provide liquidity (including a cut in its overnight lending rate) helped stabilize markets and stocks wound up finishing the month in the black. Large-cap stocks, as measured by the S&P 500* gained 1.5 percent. Small-caps saw better gains - the Russell 2000* was up 2.3 percent - but still trail large-caps by a significant margin year-to-date. Growth has outpaced value across the market spectrum, by modest margins in August, and by larger margins for the first eight months of 2007. Foreign stocks lost 0.7 percent in August based on the MCSI/EAFE index*. The volatility in stocks drove demand for higher-quality bonds. So far, the size of the equity correction has not been alarming - the S&P 500* was down 10 percent at its worse. There have been 87 10 percent declines in the S&P 500* over the past 80 years. That amounts to slightly more than on per year on average - so a decline of this magnitude has not been rare, though we have not experienced one for quite a while. Hope you enjoy the fall and the Buckeyes!!
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August 19, 2008 @ 05:49 PM
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*An Index is a portfolio of specific securities. The performance of which is often used as a benchmark in judging the relative performance of certain asset classes. Indexes are unmanaged portfolios and investors cannot invest directly in an index. Past performance is not indicative of future results. Investors should be aware of additional risks associated with international investing such as increased volatility, currency fluctuations and differences in auditing and financial standards. Investors need to be aware that no investment plan/asset allocation can eliminate the risk of fluctuating prices and uncertain returns. Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax or legal advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary; therefore, the information should be relied upon when coordinated with individual professional advice.
Robert S. Keidan is a Registered Representative of and offers securities products & services through Royal Alliance Associates, Inc. Member FINRA/SIPC, a registered broker-dealer. In this regard, this communication is strictly intended for individuals residing in the states of AL, AZ, CA, CO, FL, IL, KY, MD, MI, MO, NC, NY, OH, PA, SC, VA, and WV. No offers may be made or accepted from any resident outside the specific states referenced. |
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