The Markets May 7, 2008

April Began Path of Recovery for World Equity Markets

Strong returns in April helped world equity markets bounce back from a bad start in 2008, according to data from Standard&Poor’s.
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S&P’s The World By Numbers reported that developed markets posted a 5.15% gain in April after losing 8.95% in March, and emerging markets climbed 7.49% in April after falling 5.11% the month before. (See World Equity Markets Off to a Bad Start)

Norway produced the only double-digit developed market gain in April at 11.25%, according to an S&P news release. Other frontrunners were Japan (+6.61%) and the United Kingdom (+5.85%).

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S&P said 24 of the 26 markets were up for the month, with only slight losses posted by both Finland (-1.34%) and Denmark (-0.21%).

In emerging markets, double-digit gains were posted during April for both China (+15.10% versus -12.36% in March) and India (+11.49% versus -12.35% in March). Six of the 26 markets posted double-digit gains, with 16 markets increasing and 10 declining. Turkey made a strong rebound from a 20.09% loss in March to lead all markets with a 15.75% gain in April, the release said.

All 10 sectors posted gains in April—the first time since October 2007. Energy profited the most in the month posting a 12.05% gain. Materials (+6.61%) and Financials (+6.64%) also had strong returns. Consumer Staples performed the worst, posting a slight gain of 0.44%.

Growth stocks (+5.67%) outperformed Value (+4.61%) for April, with a much wider variance in the Asian-Pacific markets where growth prospects produced a 9% increase versus 4.99% for value. The wider variance was also noted in Japan (growth +14.83% versus value +5.79%).

The S&P/Citigroup World By Numbers report for April can be accessed at www.worldbynumbers.standardandpoors.com.

Data & Research May 7, 2008

High-Net-Worth Rely on Do-it-Yourself Advising

Forty percent of high-net-worth individuals are concerned with the risk of not being able to live comfortably on their available level of income in retirement, said a survey from Phoenix.
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Half of those surveyed said they worried about inflation eroding the value of their income (up from 42% last year), according to the survey from The Phoenix Companies, Inc., monitoring the attitudes and financial behavior of high-net-worth individuals in the U.S.

The mortgage crisis might not have had as much of an effect on high-net-worth individuals, as the majority (60%) surveyed said they do not consider home equity as part of their retirement savings, said the report of the results. Nearly half (49%) of high-net-worth individuals see real estate as a safer investment than the stock market.

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DIY Advising

The survey indicates a trend toward do-it-yourself advising, as 50% of high-net-worth respondents said they rarely seek professional advice when making a major financial decision (up from 45% last year), and 41% do not have a primary financial adviser.

When asked about their financial decisionmaking, 29% said they “make all their financial decisions completely on their own with little help from anyone,’ the survey said.

Growing Pessimism

Half of those surveyed expressed pessimism in regards to the economy for the next one to two years—a 20% increase from last year, the results show. Thirty-six percent expressed optimism and 14% were neutral about the economy.

The report pointed out that the survey—collected in February and March—was conducted before the Bear Stearns meltdown.

Harris Interactive collected responses from 1,900 randomly selected individuals with net worth of $1 million or more.

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