Across My Desk: First-Half Facts and Figures
It has not been a pretty year for investors. I've read all sorts of things from it being the worst start of a year in decades to the some of the worst trading months since the Great Depression. But whatever the big picture reality is, what matters most is how not how others are doing but how your personal investments are holding up.
To that end, here are some first-half of 2008 facts and figures:
In early June it was reported that Fidelity Investments was having one of its weakest first five months performances in recent history with only 39 percent of Fidelity's equity funds in the top half of their peers. A year ago, 64 percent were, according to Morningstar and The Wall Street Journal.
On the other hand, 75 percent of the American Funds' were in the top half of their peer groups, while 63 percent of the funds from the Vanguard Group were.
As for mutual funds, well, take a look:
According to Lipper, the average US Diversified Fund was down 2.9 percent for the first half of 2008; the best performer in that group was Commodities Funds---they on average were up 20.6 percent.
In the Sector Fund arena, Natural Resources Funds were ahead the most, 15.4 percent; Financial Services Funds down the most, 11 percent.
Global Equity Funds had only one bright shining star, Latin American Funds. They were up on average about 16 percent. All other fund types were underwater.
Bottom line, of the 12,840 equity funds that Lipper tracks, the average year-to-date returns for the first half of 2008 was a minus 2.62 percent.
To keep some perspective, or for what it's worth, consider the following:
- In 1974, the Dow Jones industrial average plunged 30 percent in the first nine months of year and rebounded 16 percent in October.
- After three years of big loses, stocks jumped 21 percent in 2003.
- The price-to-earnings ratio of the S&P 500, based on corporate bottom lines of the past twelve months, is 20 percent lower than it was at the beginning of the year, and half of the 31 multiple it was back in 1999.
- In the early 1980s, unemployment hit 10.8 percent; today it's about half that.
- In the 1970s, inflation topped 12 percent. Today, it's at 4.
If there's one thing to keep in mind as we face the second half of this investing year, never forget that cash is king. Always. No matter what.
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