By Jack N., FocusShares Communications Analyst and Guest Blogger
If your investment knuckles aren’t white, then perhaps you sat out the market ride called “Volatility 2011.” 2011 offered lots of thrills and chills, and plenty of lessons for individual investors. Check out some of these highlights (or lowlights, if you prefer).
Occupy Wall Street
The Occupy Wall Street protests evolved from a small, but dedicated group in New York City focusing on, well, Wall Street, to a multi-issue, national movement focused on the 1 percent that it claims are increasingly disenfranchising everyone else politically and economically. So far, investors seem to be shrugging their shoulders.
Goodbye to a Visionary
Technology investors and Apple enthusiasts will remember 2011 as the last year with Steve Jobs’ influential vision moving products and stock prices. And no doubt they will be wondering what the future holds without the gadget guru’s flair for understanding just what consumers want.
Eurozone
Never have Americans spent so much time considering the Eurozone as they did in 2011. A country-by-country debt crisis threatened to break up Europe’s euro partnership as first Greece, then Italy, faced dire debt crises. Never mind questions like, “Is Italy too big to save and too big to fail?” Investors and leaders around the globe are asking themselves: “Will the grand experiment with a combined European monetary system fail?” If so, what does that mean for markets and investors like you and me?
Bonds and Treasuries
With yields falling on corporate bonds and treasuries, and with volatility among stocks rising, a popular investment play in 2011 was buying solid dividend paying companies. Put another way: Remember when we thought our grandparents’ investment in the local electric company was quaint, safe, anemic and dull? Well, the utility sector, and its big dividend utility companies, delivered the highest returns among 11 broad-based U.S. sectors in 2011.
Lucky to be Employed?
Were you looking for a job in 2011? If so, you were hardly alone. More than 13 million other Americans at the end of November were looking for work, and nearly 6 million were classified as long-term unemployed – defined as those unemployed for more than 27 weeks. While there were some glimmers of hope near the end of the year, chronically high unemployment had many Americans recognizing the need to have money set aside not just for emergencies, but just in case they lost their jobs. In case you’re looking, we’re hiring!
Downgraded
So what financial catastrophe would befall this nation, and our portfolios, if a major ratings agency took the extraordinary step of downgrading the U.S. debt from AAA status? Well, we found out in 2011. And the nightmare scenario didn’t pan out. Standard & Poor’s pushed the U.S. credit rating to AA, and the safest place to put your money remained the safest place to put your money. The Eurozone meltdown might have something to do with it, but it shows that in the end the markets and investors will have the last say creditworthiness of the United States.
The Fed
For a central bank that supposedly is out of bullets in its efforts to improve the economy, the Federal Reserve continues firing salvos. Ignoring concerns that easing money supply ultimately will unleash the hounds of inflation, the Fed and chairman Ben Bernanke continue to keep key interest rates low.
Recession or Depression
The country officially avoided a recession in 2011, thanks in part to oil prices falling over the last seven months of the year (after rising for the first five). But the housing market continued to languish in a way that made some older Americans yearn for the good old days of the Depression. So what will spark the country into meaningful growth? Maybe consumers. The last few months saw Americans heading back into stores buying items that they had been avoiding for a couple of years.
Closer to home (and our hearts), we rolled out our mobile app, launched online banking for clients, improved the Scottrader® Streaming Quotes trading tool and Scottrade’s FocusShares® launches a new suite of 15 low-cost ETFs. What was your favorite happening from 2011?
Jack N. has been with Scottrade since 2011. He is responsible for public relations for FocusShares.
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