We  want to be in the fund categories other investors avoid. During the market comeback's last hurrah, investors began piling back into junk bonds and foreign, small cap, natural resources, and commodities funds. We prefer investing in these areas when prices are down as investors scramble for safety. Today's investors are worried about inflation, which usually ensures inflation won't be a big problem. ...read the rest of this article»

While the ten-year return is still slightly negative, over the last 12-months the S&P 500 was up just under 39%. The 70% run-up from the lows of early March are fueling optimism. Just not around here. We’re planning on slimming down our stock stakes soon. As dyed in the wool contrarians, we prefer when stocks seem to have nowhere to go but down. ...read the rest of this article»

Are investors who buy stocks now April fools? Stocks are definitely more expensive than they were during the financial panic, but they're cheaper than they were right before it started, back when the Dow tipped the scales at 14,000. ...read the rest of this article»

Inexplicably, investors are more afraid of runaway inflation than depressions or panics, although both have occurred more frequently in our nation’s economic history. Even during this last face-off with possible depression, most investors were more concerned about inflation than deflation, perhaps the main symptom of an economic depression ...read the rest of this article»

January was the first real down month since the market recovery began on March 9, 2009. In January, an investment in the Vanguard 500 Index Fund (VFINX), which owns the stocks in the S&P 500 and includes dividends along with (ultra low) fund expenses, would have returned a negative 3.6%. The only other interruption during the strong comeback was a 1.87% drop in October 2009. ...read the rest of this article»

For stocks, 2009 was the best of times and the worst of times. It was the end of an Age of Foolishness, but unlikely the dawn of an Age of Wisdom.  ...read the rest of this article»

Although bubbles appear obvious in hindsight, when you're in the midst of one, everything feels quite rational. Whether speculating in Florida real estate, Internet stocks, gold, or even tulip bulbs, most participants in the frenzy could recount their financial ruin by saying, "I guess you had to be there." ...read the rest of this article»

Fund managers are arguably quite skilled at determining relative valuations. For example, an emerging markets manager can tell whether a Brazilian telecom company is a better deal than a Mexican cement company, but he'll never sell his emerging markets stocks after realizing emerging markets may be in a bubble. That's our job. We pull away the punch bowl before the market gets too drunk. ...read the rest of this article»

Recently, fund investors have abandoned money market funds and similar near-zero interest investments, like short-term government bonds, in search of higher returns. Of course, being overly cautious is usually a bad idea. But trying to capitalize on irrationally high returns on higher-risk investments while eschewing safer investments isn't very smart, either. ...read the rest of this article»

Stocks should be the best performers over the next decade. This prediction has less to do with our overall outlook on the economy, market, and valuations, and more to do with where investors are putting their money. Investors often shift money to broad categories and specific areas after a hot streak and shortly  before a period of under-performance starts. ...read the rest of this article»