Investors' Wish List

Posted by: Ben Steverman on December 24, 2008

What, in a perfect world, would investors like to see under the tree?

1. A promise that stocks will move higher in January.
The Stock Trader’s Almanac argues for the importance of its January Barometer:

…the most crucial indicator will be the full-month January Barometer, which states as the S&P 500 goes in January, so goes the year. Devised in 1972 by Yale Hirsch, this gauge has provided an accuracy ratio of 91.4%. It will be especially indicative with the market reacting to the agendas and priorities being set by the new Obama administration and a new Congress convening in addition to regular slew of economic data releases, earnings announcements and market forecasts.

The barometer was correct in 2008, when stocks tumbled almost 8% in January, then dropped more than 40% the whole year.

2. An end to crazy volatility.

Since the start of the financial crisis — and particularly since the collapse of Lehman Brothers — we’ve gotten used to wild swings in the stock market. These moves occur not just from day to day, but from hour to hour, often apparently in reaction to no news at all.

It’s all a sign of investors’ confusion about where the market (and the economy and financial system) are headed. Volatility also has scared away investors who might otherwise have jumped into this market. Why buy now if later this afternoon stocks might be down another 3%?

3. More confidence for executives and analysts about where earnings are headed.
Lately, corporate executives have sounded as confused as everyone else about the state of the economy and their own businesses. Analysts are predicting S&P 500 earnings fall 8.5% in the first quarter of 2009, but analysts have been rapidly adjusting their estimates all year. Few investors take them seriously anymore. If investors could have more confidence analysts’ and executives’ predictions are right, they could consider buying stocks based on their fundamentals. But with the future so fuzzy, it’s hard to be sure that stocks are indeed priced cheaply.

4. Unemployment that stays near 7%.
It seems likely that the jobless rate is going up (from 6.7% in November), as demonstrated by news that initial jobless claims rose 30,000 to 586,000 for the week ending Dec. 20. More job cuts may be planned for the New Year as well. However, the unemployment rate can’t jump too high or consumer spending will plunge and prospects for a 2009 economic recovery become bleak.

5. An end to scandals, collapses and other confidence-shaking events.
The Bernard Madoff debacle is the latest of the big financial headlines to shock investors this year. It started with the collapse of Bear Stearns, continued with the demise of Lehman Brothers, the trouble at AIG and the Bush Administration’s request for a $750 billion bailout.

All these big headlines have rattled investors. It’s important to the stock market’s psychological health that conditions quiet down for a bit.

But if the bad news won’t stop, perhaps investors would settle for a more aggressive Securities and Exchange Commission. An aggressive federal regulator could help assure people their money is safe from the unscrupulous investment managers.

If you put together an investing wish list, what would be on it?

Reader Comments

Brandon

December 25, 2008 1:57 AM

How about an end to grossly overpaid non-performing executives? If you perform, you get paid. If not, you don't. Seems to work for Apple, and companies like Home Depot who employed an incompetent CEO who destroyed quite a bit of shareholder value might actually benefit from it.

GloomBoom.com

December 26, 2008 2:03 PM

How about an end to superficial journalists who ask stupid questions? Investors don't wish, they evaluate risk. At least if they want to survive.

jenna

December 26, 2008 8:36 PM

I wish that all GREEDY/CROOK investor will lose BILLION of dollars those who prey on small or inexperience investor like me. I just LOST my $10,000 savings last year because of them...DONT BUY STOCKS...THIS BEAR MARKET WILL LAST TILL 2012.....

jenna

December 26, 2008 8:37 PM

I wish that all GREEDY/CROOK investor will lose BILLION of dollars those who prey on small or inexperience investor like me. I just LOST my $10,000 savings last year because of them...DONT BUY STOCKS...THIS BEAR MARKET WILL LAST TILL 2012.....

Armin Stuk

December 27, 2008 7:33 AM

The end of various Madoff like behavior. An aggressive federal regulations should assure to spot such a "smart investors" as quick as possible, prosecute at the speed of light and isolate them from the society forever.

Pedro Griell Barnes

December 27, 2008 4:16 PM

The New York Exchange market needs far more regulation so that no more Maldoff scandals come along, and I wonder why the investros are not demmanding that.

Web Resources

December 27, 2008 5:32 PM

i wish these comments from Santa...

nazer

December 27, 2008 7:53 PM

Any loan avail[low intrested]against land security ?

ramanreddy

December 28, 2008 2:47 AM

very good businessweek

Rajesh calicut

December 28, 2008 5:07 AM

Hi Sir,
As you know some sort of friction is forming around the pakisthan border will it make any impact on the share market in the near future,will it deepen the situation.

seven

December 28, 2008 6:04 AM

To be a man should have something to hope!And my wish in 2009 is to work hard and learn good.

David

December 28, 2008 9:08 AM

First, there would be no such thing as 'investors', and all the crooked ones out there to be held 110% accountable. Look at Bernie Madoff, after stealing $50 billion, going free with this luxurious house arrest. More importantly, are the many innocent American citizens who lost it all... savings, retirement, pensions, all due to the greedy shysters of Wall Street, who have connived for five years, stealing them blind by scams of overrated mortgage paper.

Then I wouldn't rely on any of them. I'd learn to trade the Forex. You can get a free $100,000 demo trading account at http://forex-currencyexchange.com Click the link in the top left corner if I remember right.

It will take you to a sign up page where you just give your name and email. You can then start practicing

trading. Trading with virtual money is addicting. The only problem is, more often than not, you will be

wishing you were trading with real money. You never know, this may be something that you have a knack for.
I believe trading currencies is much better than gambling with the stock market these days anyway. Just my

2 cents.

This is just for starters. If you want to invest your hard earned cash, be your own financial advisor. Or is it that people who get taken, want someone else to blame other than themselves? Believe me, you will keep a better watch on your money than anyone else. They are all out to get rich, and screw everyone else.

America has always been about who has the most toys, but now, they are so blantant about it.

Happy New Year

David

December 28, 2008 4:05 PM

How about us investors really "trying" not to jump (and sell) at a every little piece of information that is released and allowing well established companies with good fundamentals do their stuff?? A panic driven market is destroying consumer confidence, which leads to sales declines, which leads to job destruction, which leads to further pessimistic headlines, which leads to decreased consumer confidence, and on and on and on.... PEOPLE RELAX!!!

The Comicpro

December 31, 2008 12:09 PM

How about someone who is a supposed expert telling how they really feel instead of guessing!There is no confidence or trust anymore and with the exception of my 401K I took all my personal assets out of the market last year.

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About

Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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