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FISHER INVESTMENTS MARKETMINDER

Fisher Investments MarketMinder is an online magazine bringing economic and financial news analysis to readers daily. Fisher Investments analysts scour hundreds of news sources to bring you the most pertinent and influential news of the day, providing insight and analysis to help you discern the 'noise' from the 'news' and ultimately make better investing decisions. MarketMinder opinions and analysis are based on the core philosophy of Fisher Investments.

Fisher Investments’ daily commentary with current views on market events and key economic issues.

COVER STORY

Sunk by Saving?

1/7/2009 By Fisher Investments Editorial Staff

Consumer health has been at the tip of everyone’s tongue—now some worry more saving will make things even worse.

Layer Cake Regulation

1/6/2009 By Fisher Investments Editorial Staff

The SEC’s long-awaited report on FAS 157 only complicates things.

Links to third-party news stories we believe either: 1. Correctly interpret market issues and current events, or 2. Perpetuate investing myths, basic misunderstandings of capitalism, and other common market misperceptions.

TODAY'S NEWS ROUNDUP

SENSIBLE STORIES

Needed in 2009: More Failure

By Rick Newman, US News

We don’t agree with everything, but the basic premise that bailouts often don’t solve larger problems and stifle innovation is an important one.

MARKET MISPERCEPTIONS

Just Keep on Trucking in the Land of Acronymia

By Gerard Baker, The Times

Car deals are now a doomsday sign? We don’t think so.

A review of the day’s global market action.

GLOBAL MARKET UPDATE

MarketMinder believes now is a time to be bullish amid pervasive bearish sentiment. Below is a summary of today’s market action (as of market close Tuesday, 01/06/2009):

• Global Equities: MSCI World (+0.9%)
• US Equities: S&P 500 (+0.8%)
• Best Country: UK (+2.2%)

• Worst Country: Japan (-1.3%)

• Best Sector: Materials/Tech (+2.8%)
• Worst Sector: Utilities (-1.4%)
• Bond Yields: 10-year US Treasuries rose 0.02% to 2.51%

Track the MSCI World Index via Bloomberg.com

Source: Fisher Investments, Bloomberg. Relative returns represent only the major developed markets contained within the MSCI World. All returns use local prices and market hours and are calculated in $USD.

A section identifying positive financial news on a daily basis.

SUNNY SIDE

POSITIVE NEWS ONLY

Investors to Buy IndyMac - $13.9 B

By Tami Luhby, CNNMoney

The FDIC agreed to sell IndyMac to a group of private investment firms for $13.9 billion.

COLUMNS

INCONVENIENT TRUTHS

Deregulation . . . Regulation . . . What’s the Difference?

1/5/2009 | Lara W. Hoffmans

The problem with the past decade of financial deregulation is there hasn’t been any deregulation.

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TOPICS

Alternative Investments
Behavioral Finance
Capitalism
Commodities
Corporate Earnings
Currencies
Deficits
Developed Markets
Emerging Markets
Finance Theory
Forecasting
GDP
Geopolitics
Globalization
Inflation
Interest Rates
Investor Sentiment
Market Cycles
Market Risks
Media Hype/Myths
Monetary Policy
Personal Finance
Politics
Taxes
Trade
US Economy

Classic investing vocabulary defined with thought-provoking MarketMinder insights.

WEEKLY FINANCIAL TERM

Equity Risk Premium

The excess return that an individual stock or the overall stock market provides over a risk-free rate. This excess return compensates investors for taking on the relatively higher risk of the equity market. The size of the premium will vary as the risk in a particular stock, or in the stock market as a whole, changes; high-risk investments are compensated with a higher premium.

Also referred to as "equity premium.”

MarketMinder's Expanded Definition:

There’s nothing wrong with that definition, per se. The equity risk premium (ERP) is simply a backwards-looking measure of the difference between the return on stocks and that of US Treasuries. Problems arise when investors try to forecast a forward-looking equity risk premium.

These models break down for several reasons. First, they tend to use static assumptions, e.g., the current bond yield, dividend yield, or current inflation rate, and don’t allow for normal market volatility. The bond yield today may be radically different from five years from now, so one cannot make assumptions based on current market conditions.

Second, ERP models tend to be built to forecast 10 or 20 year stock returns. Because stock returns are driven by supply and demand, at this point no one can predict stock supply much more than 12 months ahead. Yet, all ERP models assume static future stock supply. Third, the models tend to propose a modest ERP—3% or 4% or 5%--and ignore the enormous historic variability in the ERP, from 19.4% in the 1950s to -4.9% in the 1930s.

Finally, when back-tested against historical data, every posited ERP model thus far has failed. Don’t make market bets based on an ERP.

QUOTE OF THE DAY

“The man who procrastinates struggles with ruin.”

- Hesiod

A weekly biography featuring an influential individual in the world of investing. Learn about the fascinating life of this capital markets pioneer.

WEEKLY MARKET MIND

Evangeline Adams
By Watching the Heavens She Became a Star

The Roaring Twenties were crazy, and naturally everyone wanted his personal piece of the action and the big, fat profits that went with it. Some invested cautiously with their meager savings, others speculated their already-large fortunes making them large—but whether rich or poor, smart or stupid, experienced or fresh, most looked for a system that would guarantee their success.

Each week, we profile an important figure in market history, highlighting the fascinating and often irreverent lives of key figures that influenced how capital markets came to be. (Excerpts taken from Ken Fisher's book, "100 Minds That Made The Market.")

Fisher Investments Legal Information

MarketMinder Website

This website reflects news, commentary, opinions, viewpoints, analyses and other information (collectively called “Market Information”) developed by Fisher Investments or unaffiliated third parties, which is subject to change at any time without notice. Fisher Investments provides Market Information for illustrative and informational purposes only.

Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Market Information is impersonal and not tailored to the circumstances or investment needs of any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security.

Market Information represents personal opinions and viewpoints of the commentators and should not be regarded as a description of advisory services provided by Fisher Investments or performance returns of any Fisher Investments client. Fisher Investments manages its clients’ accounts using a variety of investment techniques. Fisher Investments strategies are not necessarily discussed on this website or in any Market Information. Fisher Investments strategies and performance data are available to qualified investors and can be requested by calling 1-800-587-5512.

Fisher Investments does not warrant Market Information to be correct, complete, accurate or timely, and is not responsible for any errors or omissions in the information or for any investment decisions, damages or other losses resulting from, or related to, use of Market Information.

Fisher Investments Performance – Legal Information

Investments in securities involve the risk of loss. Past performance is no guarantee of future results. Not all past predictions were, nor future predictions may be, as accurate as those on this website.

Market Information includes confidential and proprietary information of Fisher Investments and third parties and is subject to copyright laws and other restrictions imposed by the provider of the information.

* Fisher Investments is an investment adviser registered with the Securities and Exchange Commission.

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