Reversion to the mean
It’s one of the most predictable trends in the investing world- “reversion to the mean.” Remember the dot-com boom? Those stocks took off, right?
Naturally, tech stocks soon fell back to earth. But people forget that the NASDAQ did eventually recover and grow again.
Markets are like that. And we believe real estate is no different.
Sales of existing homes are up 10.4% from a year ago. We’ve had five back-to-back months of increasing sales on an annualized basis. New home sales are hot, too — up more than 25% from a year ago.
Yes, there are a lot of distressed properties. Yes, the economy is weak.
But you know what? Low lending rates and increasing confidence are digging us out. The market is trying to get back to a mean.
At CoreStates, More >
Where Are Stocks Headed Next?
Friday, 22 June 2012 4:00 PM ET Bill Spiropoulos, CoreStates, and Andrew Goldberg, JPMorgan Funds, discuss the trading day and what to expect next week. CNBC’s Brian Shactman, weighs in.
Oil speculation, political unrest – both domestic and foreign- and frightening natural disasters made their mark in 2011. Due to the correlation of these stories to the financial markets, many investors are unaware of a discrete issue which will quietly but directly affect their own money and financial security: new retirement plan regulations.
The problem they target has gone unnoticed for years. In 1974, Congres passed the Employee Retirement Income Security Act (ERISA) to set guidelines for plan sponsors when structuring a retirement plan. Theoretically, ERISA did its job; in practice it failed. A 2010 study covering a 20 year period by DALBAR, a financial services research firm, found that the S&P index returned 8.20%, while the average investor returned only 3.17% in retirement plans. Why such a difference? Excessive and opaque fees are part of the answer.
In April of 2012, over 70 million workers will have their eyes opened to information that More >