Jan 04 2010

Mutual Fund Monday – What 2009 Trends Mean for 2010.

Many investors take the change in calendar year as an opportunity to assess their portfolios and the future, and hopefully get their portfolios aligned with the future direction of the stock market. One way in which to do this is to look back on the year that’s passed and see what worked and what didn’t, then ponder whether those trends will continue for the new year, or fizzle out.

Morningstar has a great article on what was hot in 2009, and why.

For starters, what was hot:

4 general categories proved to spear head the market out of panic mode:

  • Emerging markets
  • Small cap stocks
  • Commodities
  • Technology

The hottest single category for the year of all Morningstar categories and asset classes was Latin America stock funds – up 112% for the year. Diversified emerging markets rose 72%, while Pacific/Asia ex-Japan funds were up 69%.

Morningstar attributes these numbers to two factors:

  1. A general sense of relief when investors realized the panic of Q4 2008 – Q1 2009 was overblown and the global financial system wasn’t headed over the abyss. This led investors to dive back into more “adventurous” investments that they had previously fled.
  2. China’s economy showed signs of being more resilient than other economies, leading investors to return to embracing the trend of Chinese growth potential.

One could also argue, though the Morningstar article doesn’t, that the interest in commodities was due to an overall trend of uncertainty about the future caused in large part by un restrained government spending and historic federal deficits. Many people are hedging toward protecting for a possible currency crisis or at the very least, rapid rise in inflation.

Small cap and Tech stocks were hot because those kinds of stocks typically lead an economic recovery, so investors were looking to catch any stock market recovery in the early stages.

Check out the Morningstar article to see more of their reasoning behind the numbers.


Related Posts
  • My 401(k) is Over Its Pre-Crash Value! I braved my last 401(k) statement yesterday and lo and behold, what to my wondering eyes should appear but a fully reconstituted 401(k) balance! It got pretty ugly around November of last year, and I quite frankly stopped looking. But that doesn't mean I ignored it completely. I ramped up......
  • Will Today be the Day the DOW Breaks 10,000? The Dow Jones Industrial Average got pretty close yesterday to breaking the 10,000 point mark for the first time since the '08 crash. It's no surprise that there has been much attention paid to this. It is, after all, a significant number, even if it's mostly psychological. Flash Player 9......
  • Morningstar Announces Their Best Fund Managers of 2009! Morningstar has released their picks for Best Mutual Fund Managers of 2009. It's important to remember that the competition is intended as an acknowledgement of past achievements, not as a recommendation for future performance.. That being said, the rankings are determined by a number of factors, not just best return......
  • Mutual Fund Monday - Tips For Mutual Fund Investment. With thousands of mutual funds to choose from, picking the "right one" can be a daunting task. Most investors know not to fall for a short term hot streak - one or two years isn't a long enough track record to show superior skill of the management team over sheer......
  • 6 Tips For the Beginning Investor. Here's a list of some investing insight I've learned over the years that I hope will help accelerate the beginning investor's road to wealth. 1. Don't go all in at once. If you have a lump sum of money to invest and you are doing so when the market is......

Related Websites
  • Top 5 Resources To Become A Better Investor Morningstar Learning Center For beginners, the best way to become a better investor is to learn the basics of investing. Morningstar, a popular mutual fund and stock resource company, offers a variety of short courses in their learning center on everything from stocks, mutual funds, bonds, and portfolio construction. Investors......
  • Socially Responsible Investing Over at the NRDC site, they have a very interesting article up about socially responsible investing. Some might immediately think that you could never make as much money investing in "green" ventures as big bad companies, but as it turns out, you can come close. At the expense of losing......
  • Save Time, Money and Space in Over 80 Ways If you're looking for handy gadgets, tools and various items that can save you time, money or space (or all three!) this list of more than 80 top products is just what you need. Everyone's got saving money on their minds these days. Some of us are always looking to......
  • Stock Market Tips For Beginners: How To Build Investing Experience These stock investing tips focus on the successful investor’s mindset, attitude and behavior. Reminiscing from my failed experiments in investing, I realize now that I fell victim to two types of emotions: Arrogance (I thought I knew what I was doing), and Excitement (I believed I was going to......
  • The Secret of Using Dividends to Build Wealth With the collapse of the banking system and unsurety of a lot of investments, many people are rightfully concerned about where to put their money; not only to increase it, but to even hold on to it. Although we usually talk about what is considered very safe investments at Savings......

Leave a Reply

Search Engine Submission - AddMe