The market has taken a sharp tumble in the past few days. The S&P has closed at its lowest point since April 14, 1997. This brings the average Large Cap Growth manager and Multicap Growth manager down about 50% on the year. (We are beating the markets)
The economic news is grim and the Fed believes the recession, which they now recognize, will last into the first half of next year. Others think the recession will last longer. Historically the market has turned up about six months in advance of the end of the recession.
Markets are also suffering a lack of confidence. We have one president with his bags packed and another yet to assert himself. Obama should act now, or face much tougher problems when he takes office. Treasury Secretary Paulson seems to have a new game plan each day, so it is no wonder that investors are confused.
Is this the end of the world as we know it? Not likely. Government regulation, and involvement in business will grow, but the economy will recover. So far the government has thrown (literally) about 2 Trillion dollars at this problem. We have seen some results-credit markets are starting to work again-but not all of the results. […]