Word: indexes
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Dates: during 1990-1999
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...labor demands drive up wages and prices, causing the Federal Reserve to hike the cost of borrowing. But growth is likely to be lower this quarter, easing fears of an overheated economy. Investors were also reassured by Fed Chairman Alan Greenspan's statement Thursday that the Consumer Price Index is overstating inflation, a sign that the Federal Reserve probably won't raise interest rates at its monthly meeting next Tuesday...
WASHINGTON, D.C.: Fed Chairman Alan Greenspan told the Senate Finance Committee Thursday that the Consumer Price Index should be adjusted downward, and called for the creation of an independent commission to monitor future increases. Greenspan, who has long pushed for an adjustment to the CPI, told Senators he fully agreed with a December report that the index was overestimating inflation by 1.1 percentage points annually, an error that will cost the government $1 trillion over the next 12 years in cost-of-living increases and lost tax revenue. "Greenspan has been pushing for an adjustment to the CPI for years...
That's when managers looking outside the index stocks could regain the advantage. Now may be the wrong time to lurch into index funds. "They've outperformed a long time," Lipper says. "And the history of the market is regression to the mean"--meaning some other segment may be ready to do better as index stocks come back to earth...
...always, what will happen next is impossible to say. What's clear is that the indexes have been trouncing the typical stock fund for a long time. Even if this era of big-stock bias fades soon, the fee fest that comes with actively managed funds is a lot to overcome. Your odds are good in a fund with a steady manager and a superior record. But if you find yourself paying fund managers who can't find the ocean from the beach, index funds are a solid alternative...
Your story about the sizable year-end bonuses paid out by Wall Street brokerage and investment-banking firms to key employees [BUSINESS, Dec. 30-Jan. 6] blew me away. Despite the fact that their earnings underperformed Standard & Poor's 500 stock index, many Wall Street firms still gave out lavish sums of money. Your article mentioned that top traders and bankers at firms like Morgan Stanley and Merrill Lynch "will pocket $5 million" apiece. When will Mr. Average American wake up and see the extent to which he is being ripped off? And what will it take to make this...