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May 10, 2010 - Market Update

On Thursday the stock market, as measured by the Dow Jones Industrial Average (DJIA), fell at one point 998 points, the largest point drop ever, before rallying to close down “only” 348 at 10,520. During the course of the day the DJIA had an extremely high intraday price move of 11.6%. In addition, the VIX, an option based volatility and fear index jumped from 22 to 40, the highest its been in over a year. The markets now stand off 7.3% from its April high, close to matching the 8.1% correction in February. Learn More >>>

Deflation vs. Inflation

With the U.S. economy emerging from the worst recession since the great depression, investors are facing the big question of deflation or inflation and how each will impact their portfolios. Both trends can be destructive to asset values and the economy. Presently, inflation is very low. However, longer term the concern is for potential higher inflation due to the massive government stimulus programs in place along with the Fed’s liquidity injections relative to America’s significant federal government deficit. Please remember inflation erodes the purchasing power of money while deflation is destructive to real asset values (real estate, general price levels, etc.). Learn More >>>