Happenings from the Week Ended 11/14/08:

S&P 500 Week Ended 11.14.08

The S&P 500 Index ended down for the week, as market uncertainty continues to run wild.  Between the massive bailout plans of Congress, the uncertainty of the U.S. auto companies, and unemployment on the rise, it is very difficult to be a bull in this market.

My week consisted of commencing a new due diligence project, and then CPE training classes on Thursday and Friday at Grandover Resort in Greensboro, NC.

A Marketwatch reports says Citigroup is slashing jobs and raising credit card rates, one day after the bank’s shares dipped below $10 for the first time since the 1990’s.

Flexo from Consumerism Commentary wrote an article about “Banks You May Not Know About Offer High-Yield Savings Accounts.” As stated in the article, most people know about the usual suspects when it comes to high-yield bank accounts such as ETrade, ING Direct, HSBC Direct, and FNBO Direct, but there are others out there that he educates us about.

JLP from AllFinancial wrote an article titled “Leave Our 401(k)’s Alone” which discusses a recent comment made at New York’s New School for Social Research regarding: “Her plan would end the tax breaks for 401(k)s; she proposes instead to give all workers an annual $600 inflation-adjusted tax credit for retirement and force them to invest 5% of their pay into a government-run retirement account managed by the Social Security Administration. She called the 401(k) “a failed experiment.” A McDermott spokesman called her proposals “intriguing” and “part of the discussion.” Mr. Miller hasn’t so far endorsed the plan.”  I do not agree with this, as I would much rather manage my own 401(k) and/or have a professional of my choosing manage this part of my retirement money.  However, we also have the duty to educate employees about the benefits of this form of retirement savings and increase the rate of participation asap.

Seeking Alpha is one of my favorite financial analysis and opinion sites on the web.  Today, an article was posted titled “Is Buy-and-Hold Dead? Hardly” which discusses some recent comments made by Jeff Macke of Fast Money, among others, calling to the end of the long-term investment thesis.  I have been thinking about this alot lately and I am not sure about how I feel about this.  I think that buy-and-hold is not dead, however you have to do your research and you cannot just simply buy blue chip stocks at random and hope they will be positive by the time you retire.  Diversification is king and I don’t mean simply diversification of equities.  I will get into my personal diversification suggestions in future writings on this site, but I will say that I agree more with the university endowment model.  See Yale University Endowment Annual Report.

Speaking of diversification, Financial Advisor Magazine has an article posted today titled “Diversification Didn’t Help This Time.”  There is a statement in this article that discusses don’t underestimate the power of the domino effect, which is essentially the fact that all asset classes are tied together somehow and the dramatic drop in one class doesn’t mean you can hedge yourself with a different asset class - at least this time during today’s market conditions.  Just remember “the nature of the market might have changed.”