Quote of the day

David Swensen, “A fiduciary would offer low-volatility funds and encourage investors to stay the course,” he said. “But the for-profit mutual fund industry benefits by offering high-volatility funds.”  (Justin Fox)

Chart of the day

While perusing this early retirement reading list for more books to read, I ran across an interesting fellow named Harry S. Dent, Jr. His primary theory is that age demographics are strongly correlated with the economy and thus stock market prices.

When looking at your investment returns, it’s important to calculate your return after the impact of taxes and expenses (management fees, commissions, bid/ask spreads). That number is what you really end up with, but it’s never shown on any year-end statements. ETF provider iShares put out a Managing Tax Challenges brochure that shows the average annualized tax cost for actively-managed mutual funds over the last 10 years.

With the S&P 500 ending EXACTLY the same as the year before -1257.6 - it signified the boring end to 2011; many of the Indicators regressed to the mean on low Volume, with the VIX at 23. Some relative extremes did include the Inv.Intell. Bulls at 50+%; my records show a 62.9% high in Dec. of '04. AAII Bulls jumped to 40% - must be the champagne! A small number of funds flowed out of equity funds into MMFs, but the ETFs remained almost unchanged month/month.
Here are closing numbers for 2011:

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Performance comparison of "$BID indicator", Sotheby's vs. the $EEM (MSCI Emerging Markets) going back to 2003. You can see the close correlation throughout in this weekly chart. 

Check out a larger image of the same chart here.