Bogle: Recession Will Be Long, But Market Bottom Has To Be Near

Vanguard Founder John Bogle continues to see a lengthy period of continued pain ahead for the U.S. economy — but now he says the stock market has to be getting near a bottom. Bogle, who in mid-November of 2007 — just weeks before the current recession began — said there was a 75 percent chance that the U.S. would enter a recession as consumers pulled back, told Bloomberg that the recession could last another two years. “We’ve got a real problem on our hands in the economy,” he said. “I think it’s going to take at least a year-and-a-half to […]

Gross: Be Bold — But Don’t Nationalize Banks

PIMCO’s Bill Gross says that the U.S. government needs to be bolder in its handling of the financial crisis — and says that bank nationalization is not the answer to the problem. “The U.S. and global financial systems require credit creation and foreclosure prevention, not bank nationalization as currently contemplated by some,” Gross writes in his latest market commentary on PIMCO’s web site. “Trillions will be required in the U.S. alone and it is critical that there be a high degree of policy coordination among all nations, which avoids protectionist measures reflective of failed policies in the 1930s.” Rather than […]

Dreman on Why to Buy Bank Stocks, and How the Credit Crisis has Hurt Value Investors

Showing the contrarian bent that made him one of the most successful investors of all time, David Dreman says it’s time for investors to jump into banking stocks. “They will come back at some point. It’s essential to the economy,” Dreman tells Q1 Publishing. “We need a banking system we’re confident in. We can’t work without a banking system. We can patch it up for a while and the government will probably take some stake in a lot of these banks they already had, but we need a banking system. So I would buy banks.” Dreman says he wouldn’t go […]

Study: Index Funds Top Mutual & Hedge Funds

Index funds may sound boring, but in his latest New York Times column, Mark Hulbert offers some data that indicates index funds may, in the end, actually yield higher net returns than mutual funds and even hedge funds. Hulbert details a study performed by Mark Kritzman, president and CEO of Windham Capital Management and a professor at M.I.T. In the study (presented in the Feb. 1 issue of Economics & Portfolio Strategy), Kritzman developed an complex method to measure the performances of thee hypothetical investments over a 20-year period — a stock index fund that averaged a gross return of […]