Thread: Mo's Account Talk

I'm with you on the G fund - but be apprised that four years ago the small/mid-caps were roughly 20% under-priced relative to large - caps. Now they are about 10% overpriced. Moreover, in a rising interest rate environment, large-caps tend to do better.

There are opportunities in this market. One thing is to not look at all equities in the same light. There has been a profound difference in the performance of large - cap growth stocks and small - cap value stocks over the last five years. Over the past five years, according to the Morningstar style indexes, large growth stocks have declined 15.5% a year, while small - cap value stocks have risen 18.4%. That's just a phenomenal performance differential.

I don't mean to lecture - just looking for someone to listen. The sp500 must hold 1220 and make a push higher in the next few trading days. If repeated attempts at 1240 are met with continued selling - a correction is on the way.

Dennis

BT,

Why do you say small caps are 10% overpriced?

Because of the IFT limits, I'd prefer to begin the month in equities.

On the other hand, lots of chatter about additional hedge fund redemptions coming which could lower valuations. So I'd appreciate hearing where others plans to start the year and why. If you favor equities---which one(s) and why. Thanks.

Mo