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Time is Running Out

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October 19, 2008 – Comments (2)

The title is of an article that I found interesting.  The author talks about the regrets of not taking action to all the bear messages.

It also has a hedge mentioned, but I have no idea what it means, 

"It's instructive to see how unhedged portfolios performed subsequent to the 1929 debacle. Kirby assumes a hypothetical Roaring Twenties investor puts $100,000 into the market at the worst possible time: Sept. 30, 1929. The mix is 60% S&P 500-type companies and 40% U. S. Treasury bonds. From October, 1929, to June, 1932, the Dow Jones Industrial Average lost 88% of its value and it took 22 years -- to the summer of 1954 -- to recover those losses. If this same investor focused on large-cap blue chips, reinvested all dividends and interest, and rebalanced annually, the portfolio would have recovered to $100,000 again by February, 1936 -- a much shorter time frame than 1954."

2 Comments – Post Your Own

#1) On October 19, 2008 at 10:58 PM, mickeyc21 (29.77) wrote:

The author of that piece isn't talking about a hedge at all. He's saying that blue chips bounced back faster.

Hopefully this would be obvious to all why this happened. 

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#2) On October 19, 2008 at 11:10 PM, mickeyc21 (29.77) wrote:

Wow this is terrifying. The guy that wrote that article, Jonathan Chevreau, is the Financial Post's personal finance columnist.

I assumed by the writing style it was a fluff column until I researched it. 

What is their hiring criteria? 

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