Global stock markets welcomed the new year with strong advances on the first day of 2009 trading, extending the gains achieved during the last week of 2008. The S&P 500 rose nearly 7% last week and is up 24% since the late-November bear market low. While stocks rallied, some of the shine came off U.S. Treasuries, as the 30-year bond fell 6% in just two days. This strong equity market performance continues the recent trend of investors shrugging off bad news, suggesting stocks may have fallen enough in 2008 to discount the difficult economic conditions the world is experiencing today. Of course, trading volume has been at seasonal lows, so the real test comes this week when both bullish and bearish investors return to work.
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the Funds or any stock in particular, nor should it be construed as a recommendation to purchase or sell a security, including futures contracts.
There are risks involved with investing, including loss of principal. Current and future portfolio holdings are subject to risks as well. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Narrowly focused investments and smaller companies typically exhibit higher volatility. Bonds and bond funds will decrease in value as interest rates rise. High-yield bonds involve greater risks of default or downgrade and are more volatile than investment-grade securities, due to the speculative nature of their investments. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume.
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