TUESDAY MARCH 9, 2010

Happy Anniversary!

Today, March 9, 2010, marks the one year anniversary of the market bottom for the S&P 500.  The index bottomed a year ago at 676.53 and today stands at 1138.45, up an amazing 68%!  This is the strongest 1 year rally in the last 75 years!

There were few among us that were pounding the table to buy equities at this time last year.  The fear was as great as I have ever experienced.  The market first experienced trouble in September of 2008.  However, the market bottomed on November 20, 2008 and many felt that the worst was over.  The first 5 trading days of 2009 were positive, but then the markets began to deteriorate rapidly.  This second race to the bottom scared the heck out of the investors, leading to a peak to trough decline in the S&P 500 of an horrific 57%.  Many declared the death of equities in those dark days.  Many stated that the buy and hold strategy was a failure and investors needed to "trade" the market.  

The results of the last year demonstrate the unpredictable nature of the markets.  Indeed, 20% of the market's recovery occurred in the first 10 trading days!  40% of the recovery occurred in the first 40 days!  Market timers waiting to reenter the market missed out on a substantial part of the recovery before anyone was comfortable in stating there even was a recovery!

There is never a shortage of naysayers, and there is plenty to be concerned about today.  Budget deficits, sovereign debt, high unemployment, inflation...the list goes on.  Nonetheless, I continue to see robust corporate earnings and an improving economy pushing the market higher.

Happy Anniversary, Market.  May we not revisit those days anytime soon!

POSTED AT 1899-12-30 15:32:00.0

KEN ENTENMANN, CFA
SENIOR VICE PRESIDENT AND
THE DIRECTOR OF INVESTMENT MANAGEMENT SERVICES

Ken is a Senior Vice President and the Director of the Trust and Investment Services at Alliance Bank, N.A. He has 23 years of investment experience and oversees the management of assets totaling $1 billion. He holds a B.S. in Applied Economics and Business Management from Cornell University and an M.B.A. from the William E. Simon Graduate School of Business Administration at the University of Rochester. He has also earned his Chartered Financial Analyst designation. He is a member of the Executive Committee of the Trust Division of the New York Banker's Association. He is also a director of the Central New York Community Foundation.

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