March Lows a "Textbook Bottom,"

Discussion in 'Economics' started by S2007S, May 7, 2009.

  1. S2007S



    I guess everyone would say that if they had $235 Billion of assets....

    March Lows a "Textbook Bottom," Buy the Dips, Says Schwab Funds CIO
    Posted May 07, 2009 08:45am EDT by Aaron Task in Investing

    March 9 was a "textbook bottom" and investors waiting for the retest may never get back in, says Jeff Mortimer, CIO of Charles Schwab Investment Management, which has about $235 billion of assets.

    The outperformance of riskier sectors - smaller-cap, growth and economically cyclical names - has all the hallmarks of prior major bottoms, including 1974 and 1982, Mortimer says in
    the accompanying video, which was taped prior to Wednesday, the latest installment in the post-March rally.

    Although valuations never got as low in the current cycle vs. 1974 or 1982, the low inflation environment makes every dollar of earnings worth more, supporting higher P/Es, he argues.

    For investors who've been skeptical of the rally's staying power (like yours truly), Mortimer's advice is simple: dollar-cost average into stocks and use pullbacks to increase equity exposure to levels appropriate to your age and risk tolerance.
  2. I remember it being pretty calm and orderly actually. I would call a "textbook" bottom something with more fear, panic associated with it and very high Volume. I just didn't see this happen in March I'm afraid to say. I love this hindsight analysis that makes it appear so clean cut. Guess we should all buy stocks now right LOL
  3. There's been nothing "textbook" about the last 10 years, let alone this current recession.
  4. Thank you. I thank you because I think your comment is 100% rational and logical, and in full disclosure, I happen to completely agree with it.

    It's been easy to push these markets higher since the May lows because there's been niggling volume.

    Volume has picked up only as of late.