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Celebrate 2011 – An “Outstanding” Year or One of the “Hardest Ever” for Investors?

Among my various readings over the past 2 weeks, I cam across these two articles:

11 Reasons Why 2011 Was an Outstanding Year for Investors

and

This Chart Explains Why 2011 Was One of the Hardest Years Ever for Investors

Both articles were interesting reads, though I didn’t notice the opposing titles until I reviewed my “article ideas” folder on Evernote (side note: an awesome service by the way). So you must be asking, why can people be saying such opposite things about the climate for “investors?” And I’m sure you’re wondering, which one is correct?

Let’s remove that need that we all have these days to skip the meat and go beyond the headlines. Let’s dig into the arguments in the two articles.

The first article basically argues (my words) that because there is more information, more transparency, more moves from the advisor community toward a transparent fee model, and more options for investor education, that individual (especially small) investors, are in the best position as they’ve ever been in terms of transparency, education and advocacy.

The second article analyzes a chart of the 10 year treasury note yield compared to Nomura Securities’ proprietary “Surprise Index.” The article explains that the volatility of 2011 made it very difficult for professional investors. I also agree with this article because week to week, in the trenches, I myself had no idea what was going on – whether Europe would cause markets to fall through the floor or the market would respond to low valuations and buy up stocks. Therefore, with risk management methods in place, many investors were “whipsawed” in and out of investments from July to December.

So my answer to you is  -both articles are correct in my opinion. It has been an excellent year for the individual investor as strides were made and advances came in advocacy and resources for us all. And it was a tumultuous year in the stock charts making it tough for professionals to make money if risk management were the key.

In closing – the biggest lesson from these two article is that we should read the MEAT of what people are saying and not just the headlines. Furthermore, we should ponder and research that “meat” and try to understand the argument – and agree or disagree after much thought.

Debating and discussing with intelligent thought as opposed to howls of emotional rage are much more enjoyable and enlightening. Read both articles linked above and share your thoughts here – is either article’s argument right, wrong or incomplete?

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