I decided to use this week's market commentary to explain in general our Market Commentaries, as well as highlight the other types of content we publish on our website and what that content entails. I will also be including a teaser as to what you can expect in our next Special Report that we will be publishing on our web site later this weekend.
It would be so easy if we could make an investment decision based on what happened last year, or for that matter, the last ten years. It would be so easy if we could make an investment decision on the most recent news stories coming out of Washington. It would be so easy to make an investment decision if all we had to do was .....
The market's decline late last week was directly related to the bonus payments made by AIG to a few of its employees. Once the word got out our entire political system went ballistic. Our elected representatives quickly jumped to action and held a vote to place a 90% tax on any bonuses paid by companies who received bailout funds to employees whose household income exceeds $250,000. Senators did not want to be left out as they too said they would consider a similar measure.
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A Spoonful of confidence is just what the market needed and boy did we get our share last week. The markets had their best showing since last November. Three of the biggest banks in the country, Citigroup, Bank of America and J.P.
We here at Anderson Griggs always like to see our beliefs and philosophies reaffirmed within the media. Especially when the underlying meaning of these beliefs goes unnoticed. Last week, an article titled "Despite Risks, Workers Guzzle Company Stock" in the Wall Street Journal quickly drew our attention. It seems many of the large company employees have recently begun purchasing more and more of their own company's stock for their 401(k) plans.
Headlines continue to poor salt in our wounds as we are reminded that the markets ended February with a burst of selling, establishing a new 12 year low. Our market pundits have taken this new low to remind us that the stock markets' February results rivaled those of the great depression year of 1933, the record holder for the worst performing February.
On February 12th, the Financial Industry Regulatory Authority (FINRA) fined two Wachovia units more than $4.5 million for violations related to the sales of mutual funds and Unit Investment Trust. The fines were levied against Wachovia Securities and Wachovia Securities Financial Network. FINRA stated, "Firms must consider all relevant factors when recommending securities. The failure to provide available discounts or recommend a suitable share class wrongly increases costs to investors".
On May 25, 1983 Star Wars Episode VI: Return of the Jedi was released in theaters around the globe. Our hero Luke Skywalker had matured into a Jedi Knight and saved the world from the second and greatest Empire Death Star, turned his father Darth Vader from the dark side and watched as the evil Emperor was cast into the massive machine's reactor never to be seen again. In 1983 most of Americans were ready for a new hero to defeat the evils of stagflation and give us hope in the future.
As each new year rolls around, we at Anderson Griggs go through certain processes, evaluating both the economy and the investment industry. One of the things we study is the fees charged to investors so as to know where we fit in with our competition. As I was running my evaluation of mutual funds, using Morningstar's Principia program, something quickly jumped out to grab my attention. For the 2008 year, ending December 31st, the average gross expense ratio for the 26,000+ mutual funds Morningstar follows, was 3.15%.
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