By
My goodness, this year certainly got off to a bad start! Various reasons have been advanced as usual but the gist of it all was that investors thought things were going too well. Unemployment is down, productivity is up, and, worst of all, we managed to avoid the Y2K bug.
Of course, the real fear is that all the good news might prompt the Federal Reserve to raise interest rates, which would reduce corporate profits and entice dollars away from stocks and into bonds. (Not my dollars!)
But today, even the tech stocks -- hardest hit as usual -- started to rally, and the Dow actually set a new high. Meanwhile the S&P and the Nasdaq are climbing back out of the hole they fell into earlier this week, so I guess we can all relax and have a nice weekend.
Our Foolish Four Portfolio finished its first full week looking pretty good. Pilots say any landing you can walk away from is a good one. Any week where your investments go up 1.6% is a good one, but the first part of this week sure felt like a crash, and I know a lot of new Foolish Four investors were wondering just what the heck they'd gotten themselves into. Welcome to the market! And yes, it's like this a lot.
Investors seem to be getting over their fears of Caterpillar <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CAT)") else Response.Write("(NYSE: CAT)") end if %>. The stock has risen almost 20% since we renewed it. It just goes to show, you can't stop a seven-ton earth mover.
Our next best performer has been General Motors <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GM)") else Response.Write("(NYSE: GM)") end if %>, the stock I gave all kinds of reasons not to invest in last month. I guess I'm glad I have to be a strict constructionist when it comes to following the strategy. If I didn't have to set a good example, I might have skipped GM in favor of SBC Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SBC)") else Response.Write("(NYSE: SBC)") end if %>, which has gone nowhere but down since the day we renewed the portfolio for the year.
Of course, we are only talking about two weeks -- it's not like there is any particular significance to any of this.
What might be significant is that we are participating in an economic miracle. Sure, the world's got problems, but in many, many ways we are solving those problems and reaching for the stars (or at least Mars) at the same time.
Fool on and prosper!