Investment Guide 2004 Index
IGINDEX2004.pdf
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2004
Jan. 2004 – Health Savings Accounts: Opportunities for Investors
A new way to pay for health care that was introduced by the Medicare Reform Act in December combines an insurance component with an intriguing savings kicker. The new plans, called health savings accounts (HSAs) are designed to help individuals save for qualified medical and retiree health expenses on a tax-favored basis. Contributions to these
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Feb. 2004 – Lessons from 250,000 Years of Stock Returns
The following article was condensed from “Some Lessons from 250,000 Years of Stock Returns” by Truman A. Clark of Dimensional Fund Advisors. “My stocks are down 30 percent. What are the chances they will come back soon?” “Man, I wish I had been out of stocks for the past three years. How often are stocks
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Mar. 2004 – Martha, et al.
The highly publicized case against Martha Stewart has focused attention on the notion of insider trading. These events, as well as the trend described by the Wall Street journal article reprinted herein, serve as a reminder that individual investors are not well served by stock picking. The capital markets assimilate information with stunning efficiency. This
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Apr. 2004 – Tweaking the Dow
On April 8 the 30 component companies of the venerable Dow Jones Industrial Average (DJIA) were changed for the first time since 1999. Eastman Kodak, AT&T, and International Paper were dropped while Pfizer, Verizon and American International Group (AIG) were added. Although two of the firms that were replaced were in our high-yield Dow model,
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May 2004 – Rising Rates
The month of April ushered in news signaling very solid economic growth, and the bond market responded by sending interest rates to their highest level in a year, as shown in the first chart below. Conservative investors who have structured their portfolios in accordance with our recommendations might be anxious about the decline in their
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Jun. 2004 – Investing and Inflating
Price inflation is back, if the pundits have it right. Until very recently the financial media was awash in warnings of “deflation.” Now, in the face of rising energy and food prices, and with statistical indicators increasingly pointing toward stronger economic growth, price inflation is back in the news. In our view, monetary inflating is
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Jul. 2004 – Microsoft Comes of Age
Not long ago, during the late 1990s, tech stocks were all the rage and common stock dividends were regarded by many to be archaic. But sentiment changes quickly; on July 20 Microsoft announced an unprecedented onetime payout of $32 billion to shareholders, or $3 per share, and doubled its regular dividend to $0.32 per share.
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Aug. 2004 – The Market “Pros”: Often in Error but Never in Doubt
The Wall Street Journal warned in early May that “Nearly everyone agrees the bond market will take a hit when the Federal Reserve starts raising interest rates, perhaps as early as next month.” The Fed did in fact raise the target federal funds rate from 1.00 percent to 1.25 percent on June 30, but the
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