Things To Think About

By Dian Vujovich

My circle of friends is a wide one. I know people whose fortunes have been substantially diminished by the market’s fall this year; others who won’t open statements received from the brokerage firms they work with; and many who don’t have a penny invested in stocks. That last group is the happiest of the lot these days.

Whatever your situation, here are a few things to ponder as Wall Street continues to do its Dance of A Billion Cleanses:

In the nearly 30 years that I’ve been watching the market, I’ve never seen the average performances on stock funds fall so low. According to Lipper Inc., the year-to-date performance of the 8,543 U.S. diversified equity funds that they track was down 47.54 percent through Nov. 20. Looking at all of the 13,155 equity funds tracked, the average year-to-date performance is off nearly 50 percent — 49.9 percent to be exact.

Yesterday, my dear friend Steve the Economist (definitely not to be confused with Joe the Plumber) suggested I consider this view of market conditions rather than a freak-out one. “Look,” he said. “The market has lost about half of its value. Do you really think companies are worth half of what they were a year ago?” My answer was, “No.” What’s yours?

Millions of people are holding billions of dollars in cash, cash equivalents and things like money market funds. Lipper reported that in October, investors added $38.4 billion to money market funds. That’s the kind of news that will bode well when the market does begin to recover.

And if doing as the Joneses do is important, Money Management Executive (www.mmexecutive.com ) has reported that the three highest-rated investment firms that the affluent use are USAA, Scottrade and Vanguard. This, according to 2008 survey results of 4,000 people conducted by Cogent Research.