Markets Continue to Sizzle

The Market was hot last year and I figured it would cool off some this year, but it continues to sizzle like a red hot tomato. Most funds I own are up 6-7% and it's only February. At some point I suspect there has to be correction but I'm enjoying the run at the moment. Suspect a lot of folks are still sitting on the sidelines from the big crash a few years ago - can't blame them, but they missed out on a 36% increase in the Dow and a 61% increase in the Nasdaq over the last 12 months and already the small caps and the small growth stocks are up 6-8% for 2004. Top fund for the year so far? - ProFunds Ultra Wireless Investments (WCPIX) - up 26.59%.

Ironic that there is such a disconnect between the market and jobs in this country. If you only looked at the market, you would think it was a fabulous recovery, but the jobs situation tells a different story. A little unsettling to hear the comment the other day that 70% of voters are invested in the market (of course that 70% is 70% of the 50% or so that actually vote). That just shows you that folks without money and investments feel like the system only belongs to the wealthy and thus there is no reason to vote. They couldn't be more wrong (about voting), but I can understand why they feel the way they do - after all, it's not like their plight has improved any in the last 20 years. Wonder come election time, if those 70% who are invested will view things as hunky dory based on their 401k's and retirement plans or if they'll look at the jobs situation. Most likely depends on whether they have a job or not! If the market continues to sizzle (unusual in an election year), that does not bode well for the Democrats.

For a look at how Bill Nygren (one of a few long time highly successful fund managers) and his group at Oakmark Funds view the process of selecting good companies to include in their funds, click here .

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