Investor Beware
Stocks were buoyant and ended up 248 points. This – in spite of the news on unemployment.
Bonds didn’t like the amount of new Treasuries coming onto the market in the future, and dropped in price – increased in interest rates.
The Dollar, Gold, Oil and gasoline all moved sideways – hard to believe.
In the news today…..
The Unemployment Rate jumped up to 6.5% last month. The number of lost jobs were revised upwards in August and September – showing that the original information announced by the government was not accurate. In other words – reader beware of government statistics.
Pending Home Sales dropped 4.6% last month. This was a surprise due to the increase the previous month. My interpretation is that home prices are continuing to decline and are a drag on sales. Also, don’t take one month’s statistics as a trend – always wait for a few months.
Hedge Funds are sitting on a cash pile of $400B – that’s a lot of money. Where did they get this cash? They sold a lot of their assets – stocks, bonds, futures, etc. That’s why these markets (especially stocks) have fallen so much. Lesson to learn – when a stock broker tells you to stay with the market, and not sell, he’s just letting his buddies (hedge fund managers) sell at higher prices so they can keep their companies afloat.
Here are Yesterday’s numbers:
Dow Jones 30 Industrial – 8944 (up 248 points)
10 Year Treasury Bond – 3.78% (up 0.07%)
Euro – $1.2762
Gold – $734 (up $2)
Oil – $61.04 (up $0.27)
Gasoline – $1.35 (up $0.01)
Would you give me a definition of what a hedge fund is or tell me where I might find one. Thank you
Hi Ann,
A Hedge Fund is an investment method invented for “high net worth” individuals. They don’t play by the same rules as a Mutual Fund, or a stock broker. An investor turns over some money to the Hedge Fund, and it invests it usually highly leveraged investments which can include commodities, gold, currencies, stocks, bonds, etc. Each Hedge Fund is usually managed by someone who has a very impressive track record.
The problem with Hedge Funds right now is that the investors are asking for their money back, and the Funds’ only recourse is to sell its assets – and that’s what’s happened in October, and could continue if more investors get scared and the market continues to drop.