The Popularity of the Weather Channel Did Not Change the Weather – Hamilton Point Investment Advisors | Chapel Hill, NC

January 2001 information is fantastic. The more data the better, properly ? Over the final few years, a profusion of new fiscal media resulted in many investors buying a few popular stocks. This lead to excessive valuations and all time stock grocery store highs. Like everything else in life, it is possible to have excessively much of a good thing .
2000 began with a Y2K wail, but ended with a bang ( or a pop ? ). After ten years of excellent breed returns, the market finally gave some back. The decade of the 1990 ’ south was marked by an median annual S & P 500 stock return of approximately 18 %. While some argument whether 2000 was the final class of the old millennium, or the first gear of the fresh, there is no argument that it was marked by negative stock returns. The Dow Jones and S & P 500 were devour roughly 6 % and 9 %, respectively, while the NASDAQ retreated by more than 39 % .
We believe that last year will be looked upon as a watershed stock grocery store year for decades to come. With the market correction chiefly behind us, though continuing in some sectors, we believe we are positioned for positive equity performance going ahead.

Reflecting on the holocene past, there is no interview that much commodity came from this menstruation of “ by and large up and some down ”. For model, the number of Americans who own banal individually and/or through their retirement plans is at an all time high ( around 50 % ). With the Internet itself and the media providing 24 hour report on the investment subject, millions upon millions of us are regularly tuned into the wonders of our capitalist system. nothing but good will come from an increasing act of individuals viewing themselves as stockholders and consequently, genuine stakeholders in the ball-shaped economy .
A similarly insidious profit from the experiences of the last 10-15 years is that the stock marketplace has shown itself to be an amazingly efficient “ allocator of capital ” for emerging businesses and ideas. The adeptness with which the commercialize both rewards and punishes may be a small faze, but the results are amazing .
To be certain, there have been holocene excesses in the market…especially with respect to Internet and related technology stocks. however, a search beyond the excesses shows enormous invention and entrepreneurial intent, the likes of which we have not seen for some meter.

Every commercial enterprise model must now justify itself casual as to its function in the raw economy. Technology and the global handiness of information, allow beneficial managers to analyze and adjust their plans promptly. Those who can not react, perish.
As for those investors who have been hurt by lower share prices, we are confident that many were investing funds that they could afford to lose and will make tax and asset allotment adjustments which will cause the year 2000 to mean short to their net worth a few years from now .
Our clients ’ equity portfolios appreciated significantly during the decade anterior to 2000, and due to diversification and our evaluation discipline, gave back relatively little or nothing last year. The year 2000 confirmed our investment approach which has produced positive results during strong markets and preserve capital during weak periods.

As for our lookout, we see numerous positives. First, many of the stock commercialize ’ s excesses are now largely behind us. second, technology will continue to improve productivity and keep inflation first gear. third base, we believe concern rates and energy prices have peaked and will head lower. finally, the global remains America ’ s “ capitalistic oyster ” and the opportunities for ball-shaped emergence remain in locate. A short recess is surely possible, but the longer condition tendency is positive .
In ending, we note that a fortune of the holocene media-inspired fiscal press ( CNBC, Yahoo, etc. ) is like the Weather Channel. Both do a perfect problem of telling viewers what happened in the past…that moment, that day or that morning. unfortunately, many viewers have learned that the media ’ s short-run views of the marketplace are ampere valuable as weather forecasts. It is now obvious that both Mother Nature and Wall Street maneuver for keeps .
Your comments and questions are always welcomed .

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