Women investing in the stock markets should have an awareness of the overall market performance. Today’s Investor’s Business Daily shows that Midcap growth stock funds have been up almost 23% year to date as of August 6 2009 while large cap growth funds have been up just over 19%. This is incredible performance especially considering where the stock market was in early March. Keep in mind that these performance numbers are for only about 65% of the year since they represent January 1 through August 6. Annualized these returns would be much higher.
The real question is what will happen from here following such a big rally over the past few months. As always there are two differing opinions. The most common one is that we are out of the woods the economy has bottomed and the stock market is headed up from here. The other less popular view is that the market is repeating the behavior of the rally following the Great Depression when it rallied around 48% then dropped back down to levels below the previous low.
Many say that this time is different regarding the stock market recovery because of global growth but “this time is different” has gotten stock investors into trouble before. I remember hearing that same statement in late 1999 because of the explosive tech boom. In hindsight we now know that time was not in fact different.
While no one knows for certain which prediction will play out having your assets allocated in a way that allows for the best possible return with a minimum amount of risk makes the most sense. Everyone must decide how much risk they can tolerate and still sleep well at night. Is your portfolio positioned to maximize returns while minimizing risk regardless of where the stock market goes from here?