Thoughts from the Frontline

Unexpected Returns

By John Mauldin

April 8, 2005

Unexpected Returns

Explaining Your Frustration
Your Investment Journey
A Storm of Volatility
The Calm Before the Storm
Into The Sunset
Leeds, La Jolla and Napa Valley

Writing on the train to Yorkshire from London, I am surrounded by a gorgeous English countryside on a beautiful spring day. Life has its moments. I like the trains in Europe. Quite a civilized way to travel. Yet every time I pull out my wallet, I am reminded of reality. The ebb and flow of the dollar has made this a most expensive country for someone from the states. Nearly everything is the same price, just in pounds instead of dollars. And a pound that is worth more than two of my pitiful dollars, at that.

It has given me cause to think about cycles, because some day in the future, the English will be complaining about how expensive it is in the states. Maybe not for a long time, but all things ebb and flow, currencies included, but especially the stock market.

The stock market in 2005 has gotten off to a mixed start. January presented losses, often not a good sign for the rest of the year. We had a little hope with a positive February, yet we are back in negative territory after March. Most investors want to better understand the implications of the current secular bear market--how long will it last, what can we expect from it, and why is it happening?

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