Time to get out of foreign stocks, and back into the S&P?
Is the rally in foreign markets over? Is the S&P about to get a boost after another lackluster year? Depends who you ask. Jonathan Clements of the Wall Street Journal seems to think the overseas rally may be about to lose steam.
The people he talked with in the Dec. 29, 2005 Personal Journal are looking at the lagging S&P as about to get a boost:
"As these and other market segments have roared ahead, many investors have given up on blue chips. But now, some experts expect the pendulum to swing back the other way -- leaving investors without blue chips eating dust."There were a range of opinions cited in the New York Times article by Conrad De Aenlle on January 8, "For Bargains, Try Spinning the Globe."
De Aenlle cites a Merrill Lynch survey which found global fund managers still rate the U.S. to be more overvalued than Europe, Japan, or emerging markets.
However, individual managers he talked with have different views from the pack, such as Mark Headley, manager of Matthews Asian Tigers and other Asia-focused funds ("Japan has gotten expensive") and Gilman Gunn, manager of the Evergreen International Equity fund ("I think the very strong three-year performance we've seen in emerging markets may be coming off the boil").
For Fidelity Observer's own portfolio, it is overweight in foreign equities -- somewhere around 45% -- a risky move which nevertheless has really helped in the past two years. However, our 2006 Roth contributions may be put into the S&P -- probably an index fund, as I don't have enough time these days to research actively managed alternatives.
Any respectable fund nowadays will compare itself with the benchmark index that most matches its holdings. There's a few problems with these types of comparisons, though. Read
If you are interested in investing in an index fund, be aware that not all index funds are the same when it comes to indices covered, fees, and rates of return. A website that can help you sort through the bewildering array of index funds ... Read
Financial articles and mutual fund marketing material often talk about Global Funds, International Funds, Emerging Market Funds, Regional Funds and Foreign Funds. What's the difference between them? I'll try my best to explain: Read
BOA is the latest company to cut online stock trading fees -- from $20 to $14 for brokerage customers, and to $10 for BOA checking account holders. The trading fee will drop to $5 for "certain wealthy customers," reports Ann Carrns of the Wall Street ... Read
