Last year in February, I wrote a blog post entitled “”A lesson from Warren Buffett on buying fear.“” The S&P 500 was down 5% from its high and the negative headlines focused on slowing global growth and worries about the Fed tapering. If you had bought on that day, you would be up over 20% on your investment!
Financial weather: Central bankers creating clear skies
In 2008, the brokers and bankers made a huge mess in the subprime mortgage markets and caused the deepest recession in decades. The finanical crisis cost the tax payers trillions of dollars to bail out the failed financial firms and to restart the nation’s economic growth engine. The message during the market recovery to Wall Street from the central bank and the government has been “don’t mess with the financial markets to cause another market crash.” The media and many pundits haven't got the message and are still writing very frequently about the impending market crash. With the recent news on Greece, the media went all out to scare people but we wrote that investors shouldn't be surprised given Greece's history of debt problems. The S&P 500 shrugged off the negative news and barely declined at all, a pullback of just 3%. Looking at the trend, you’ll notice that the S&P 500 has been trading sideways at 2080 plus or minus a few points in a narrow range since November 2014.
What a Greek bankruptcy means to your investment portfolio
A potential Greek bankruptcy has dominated the headlines over the past couple of weeks and this Sunday is a crucial referendum to decide their fate. The Greek PM Alexis Tsipras today urged its citizens to reject an international bailout deal. Many economists and investors are now expecting a bankruptcy in the near term. The big question for investors is: what does a Greek bankruptcy mean to my investment portfolio?