Investing lessons learned in 2011
Andrew Mason, founder and CEO of Groupon, attends his company's IPO at Nasdaq in November. The company's stock was up 31 percent on Day One; since then, it's been down 13 percent -- a reminder that IPOs are a gamble, an Associated Press report cautions. (Nov. 4, 2011) Credit: Associated Press / Mark Lennihan
To paraphrase Yogi Berra, it's tough for investors to make predictions, especially about the future.
That was certainly the case in 2011 for investors whose portfolios were hurt by unforeseen developments -- from Libya to Japan to Europe to Washington.
Here are some investing lessons from this year:
Treasury prices rose sharply starting in February as the weaker U.S. economy and Europe's debt crisis sent investors looking for safe investments. Yields on bonds move in the opposite direction from their price. The strong demand for U.S. debt sent the yield on the 10-year Treasury to a record low of 1.71 percent in September. It was 2 percent Friday.
How to explain bonds' unusual staying power for investors? Safety trumps all, says Gary Thayer, chief macro strategist for Wells Fargo Advisors in St. Louis.
"During uncertain times, investors are willing to accept a low rate," he says.
That doesn't mean you should ignore international stocks entirely in your portfolio. "International diversity is important in the long term," says Mark Luschini, chief investment strategist for the Janney Montgomery Scott investment firm in Philadelphia.
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Updated 8 minutes ago LI's highest-paid CEOs ... LI bars adapt to less drinking ... Flag football on rise ... Out East: Jamesport Farm Brewery
