Letter From the Editor

As the new calendar year begins mid-winter, we look forward and hope for a stable economic recovery and a stronger performance from the financial markets.  During the year 2009, the broader stock market indices earned over 50 percent after hitting a bottom in March 2009.  This was the strongest performance of the US markets after a near collapse of the financial system in late 2008.  And the economic performances (the GDP) have been positive for the second and third quarter of 2009, mainly through government intervention with the cash for clunkers program and first time home buyer credit.

In the past few years, ETF’s have gained tremendous popularity despite the financial crisis by offering investors a large diversification benefits at a low cost. The Exchange Traded Funds, an investment pool that is usually linked to a stock market index or to a particular asset class, have gained rising prominence in the recent decade with assets under management more than doubling from $ 500 billion to over a trillion dollars in just the last 5 years.  In addition an increase in the assets under management, the number of new fund’s have almost doubled from 1,000 to nearly 2,000 funds in just the past few years.  One of the successful financial innovations of the decade has attracted more investors than hedge funds with less negative publicity.  This investment pool gives way for a retail investor’s portfolio to gain exposure to different asset classes and financial markets for a fraction of the costs of an actively managed fund. The average expense ratio, a key screening criterion for short listing potential funds, for an American ETF is around 31 basis points as opposed to that of an actively managed fund, which usually averages up to 150 basis points.   The emerging markets and commodities ETF are fastest growing funds among others. 

Being an Investor Concepts reader, you would not fall behind or miss out on potential opportunities of investing in new innovations because we are strongly committed to provide our readers with the best of information and analysis on potential opportunities, trends, and analysis right to your computer screen.  In order to provide the best analysis and trends for you, our readers, we have worked out a partnership with Mr. Michael Johnston, the founder and senior analyst, of ETF database.  Mr. Johnston, a Chartered Financial Analyst, has several years of experience in the world of portfolio management, research, and analysis.  His insights and analysis (which is free for our readers) are very valuable and at par with any other financial analyst in the financial world who charge a handsome fee to provide research and analysis. 

At the dawn of the New Year, President Obama announced a new set of rules designed to limit the size of large financial firms and the activities to restrict specific activities of these institutions. Banks and firms that own banks would not be allowed to invest, own, or sponsor a hedge fund or private equity funds.  Or even engage in proprietary trading to boost their profits.  Once the new rule has been passed by the Congress and Senate, the big names like Goldman and JP Morgan may have to sell their private-equity businesses and stop investing in buyouts. President Obama is strongly committed in taking actions now to counter any financial crisis from happening in the future and hold hostage of the tax payer money.  The new rules have already raised critics on how it would be able to get to the roots of the problem, but we will have to wait and watch how this whole wave of regulations would turn out without being counter productive to the efficiency.

We will do our best to keep you updated with any news, analysis, and trends that would impact the financial markets.