Sunday, January 08, 2006

Is Anyone Listening to Bush?

Paul J. Lim in the Sunday NYTimes commented on performance of Mutual Funds in 2005. Some excerpts follow.

It will go down in the history books as the year when mutual fund investors fully embraced the world beyond their borders.

American investors poured more new money into foreign stock funds in 2005 - an estimated $149 billion - than in the previous four years combined. In fact, they put more new money to work in foreign funds than they did in domestic stock portfolios, which usually garner the bulk of investor dollars.

But what do you expect, given how the foreign funds more than doubled the returns of their domestic counterparts last year?

Some mutual fund comparisons:

Vanguard 500 Index ...........................2005: up 04.8%......2006:..up 3.1%
Vanguard Emerging Markets Index ........2005: up 32.1%......2006:..up 6.3%
Vanguard Europe Index .....................2005: up 09.3%......2006:..up 5.6%
Fidelity Latin America....................... 2005: up 55.2%......2006:..up 6.9%

American investors, in 2005 and for the first week in 2006 are bidding up foreign stocks and making a lot of money.

What good is it that Bush is trumpeting his economic leadership? Wall Street isn't listening and Main Street isn't listening either. Is anyone listening to Bush?

Disclaimer. The above does not constitute a recommendation.

Disclosure. I own some Vanguard Emerging Markets Index and Vanguard Europe Index shares and have owned them since early 2005.

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