More proof Obama is winning it big time
First North Korea, now Stock Market
http://newsblogs.chicagotribune.com/marksjarvis_on_money/2009/08/find-the-stock-markets-stars.html
Find the stock market's stars
The total stock market has climbed over 51 percent since the March lows, so it's only natural to wonder if there is anything worth buying anymore.
The answer from many a money manager is, "Yes, choose quality stocks that have been overlooked in the race to buy junky companies." But is that just a line that sounds good as the hysteria builds to pile into stocks?
Apparently, not. Research by Bespoke Investment Group shows that investors, indeed, have had an appetite for the worst the stock market has to offer. Since July 10, the average stock in the Standard & Poor's 500 has risen by 18.7 percent. But the really robust winners -- those climbing over 19 percent -- have been the market's most financially fragile companies.
You can identify those financially weak companies by looking at their credit ratings. Those rated BBB, which isn't awful but is a lot weaker than the rating on strong companies, climbed an average of 19.25 percent. And even weaker companies did the best. The 81 companies rated "non-investment grade" -- or junk -- gained 27.29 percent....Not bad for investors wandering into the riskiest of investments.
Now, look at the other side of this -- the companies with pristine balance sheets in the strongest financial condition. Such companies receive an AAA rating on their debt. And how did they treat investors in the July rally? Not nearly as well as the junk. These solid AAA companies provided a return of just 9.49 percent to their investors. Of course, that's a pretty nice return in a single month, but nothing compared to the junkiest junk
First North Korea, now Stock Market
http://newsblogs.chicagotribune.com/marksjarvis_on_money/2009/08/find-the-stock-markets-stars.html
Find the stock market's stars
The total stock market has climbed over 51 percent since the March lows, so it's only natural to wonder if there is anything worth buying anymore.
The answer from many a money manager is, "Yes, choose quality stocks that have been overlooked in the race to buy junky companies." But is that just a line that sounds good as the hysteria builds to pile into stocks?
Apparently, not. Research by Bespoke Investment Group shows that investors, indeed, have had an appetite for the worst the stock market has to offer. Since July 10, the average stock in the Standard & Poor's 500 has risen by 18.7 percent. But the really robust winners -- those climbing over 19 percent -- have been the market's most financially fragile companies.
You can identify those financially weak companies by looking at their credit ratings. Those rated BBB, which isn't awful but is a lot weaker than the rating on strong companies, climbed an average of 19.25 percent. And even weaker companies did the best. The 81 companies rated "non-investment grade" -- or junk -- gained 27.29 percent....Not bad for investors wandering into the riskiest of investments.
Now, look at the other side of this -- the companies with pristine balance sheets in the strongest financial condition. Such companies receive an AAA rating on their debt. And how did they treat investors in the July rally? Not nearly as well as the junk. These solid AAA companies provided a return of just 9.49 percent to their investors. Of course, that's a pretty nice return in a single month, but nothing compared to the junkiest junk
