Grantham: Expect 12% Returns from Quality U.S. Equities, With Active Management

In the latest 7-Year Asset Class Forecast from Jeremy Grantham and GMO (published October 31 - before the latest leg down in the market), the firm anticipates a 12.2% annual return from U.S. 'high quality' equities with active management, and approximately 11% from international developed markets. Click to enlarge:

CPI Plunge Screams Inflation

Those of you who have seen the chart below on my blog over the last year-and-a-half might have already guessed what it looks like after yesterday's dramatic plunge in the consumer price index - it's now screaming DEFLATION.Not that there's anyreal significance to the fact that it's screaming deflation.As noted here, in a world full of fiat money, "deflation" is nothing more than an am...

XLF's 'Concrete Shoes'

Lately there have been quite a few days when it looks as if the market is wearing ‘concrete shoes’ and will never be able to keep its head above water. Time and time again the financials look like those concrete shoes: financials plunge; the market follows. In fact, the performance of financials relative to the broader market has been weakening steadily since early October 2006, whe...

Pierced Hopes for Stock Bottoms

Wednesday was a rotten market day, in a rotten market month, in a rotten market year, in a troubled economy. Otherwise, things are OK. The Good News:

Automakers: Bailout Arguments, Pro and Con

For those of you who have been following this blog, you know where I stand on the proposed aid package for US automakers (see Preventing Moral Hazard in the Auto Industry for background). I am not opposed to aid for General Motors (GM) and Ford (F), provided that aid come with strict terms: A moratorium on acquisitions (whether with Chrysler, or otherwise) A rationalization of operations - a re...

FOMC Minutes: Economy is Precarious

The Fed on Wednesday released ‘Minutes‘ of the Committee meeting held late October 2008, raising the specter of more economic and financial weakness. The projections ahead suggest a prolonged and severe economic downturn with increased worries of a deep recession. Fed officials noted in their analysis that a number of adverse financial developments continue to negatively influence e...

Unyielding Yield Play: Bond Pricing as Sentiment Gauge

One rule that's held consistently in the recent market is that reaching for yield has cost investors in performance. I took a look at the FINRA data and the numbers were eye-opening. Here are the advance/decline numbers this past week for bonds in their investment grade index and bonds in their high-yield index (in parentheses):Tuesday, Nov. 18th: 1611/1232 (347/639)Monday, Nov. 17th: 1374/1422...

Bond Expert: Wednesday Wrap

Prices of Treasury coupon securities posted gains today but the extent of the gains depended on the point on the yield curve at which the security resided. The yield on the 2 year note slipped 6 basis points to close at 1.07 percent. The yield on the 3 year note dropped 9 basis points to 1.34 percent. And then the bigger gains begin. The yield on the 5 year note tumbled 15 basis points to 2.05 ...

Midweek SP 500 Overview

Now that today’s close is firmly in place, we have a potential game-changer in terms of the technical structure.  The monthly chart also shows a major bearish development  Let’s look at the current S&P 500 chart closely to see what this means. S&P 500 Daily: Not a whole lot has changed on the daily structure, provided you note that today’s price marked a fresh 2008 int...

Collectible Investments: 100-year old $20 gold piece up 65% in past five years

Filed under: Other issues, ColumnsCan investing and collecting go hand-in-hand? Yes -- especially if you are collecting coins, stock certificates, bank notes or other rare items of value. Larry Schutts, an expert in investment-related collectibles, will review items of interest from his collection and answer your questions here each week.Some 40 million American adults are considered collectors...