Fortune Watch

Five banks have repaid millions of dollars they received from the government’s $700 billion financial bailout pot, the Obama administration said Thursday.

The Treasury Department, which oversees the bailout program, said the banks returned a total of $353 million.

The banks are: Iberiabank Corp. of Lafayette, La.; Bank of Marin Bancorp of Novato, Calif.; Old National Bancorp. of Evansville, Ind.; Signature Bank of New York; and Centra Financial Holdings Inc. of Morgantown, W.Va.

They were the first banks to repay the government, wanting to escape the increasingly tough restrictions placed on participants in the rescue program.

In addition to the $353 million, the banks paid the government a total of $5.4 million in dividends, Treasury Department spokesman Andrew Williams said.

The program was enacted in early October after the financial crisis — the worst since the 1930s — intensified. The goal of the program was to inject capital in banks so that they would be in a better position to boost lending, a crucial ingredient to any economic recovery. Nearly $200 billion has been injected into banks thus far.

The five banks have 15 days to buy back warrants from the government. If they don’t, the government will sell them to private investors, Williams said.

The year 2008 has entered the record books for all of the wrong reasons; the Dow Jones had its worst year ever! So what about 2009, how will stock markets from around the world perform and which are the stocks to follow?

Well in reality you need a crystal ball to be able to answer these questions. 2009 may well be another tough year.

I am a person who enjoys investing on the stock markets and I have to say that I am a bit of a gambler; I am quite prepared to take a risk with my disposable income in the hope that I can increase it etc. Just a quick note however, I am a financial adviser and anything that I write or suggest in this article should not be seen as advice.

I personally believe in investing an amount of money (an amount that I can afford) on a monthly basis instead of investing lump sums. This way I am able to take advantage of what is commonly referred to as Dollar cost averaging in the United States. This is where when prices are high your monthly contribution may buy fewer shares or fund units but that when prices are low your investment buys more shares or fund units.

During these volatile times this method of investing may prove to be the most prudent. Even though stock markets had a very poor 2008 and is therefore quite low there may well be significant falls ahead.
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Some people consult astrologers and some don’t. Out of the ones that don’t, some believe that there aren’t any good astrologers around nowadays while others believe that it isn’t possible to foretell the future.

Out of the ones who believe that foretelling the future is impossible, some believe that the future can’t be foretold because there is no future yet. Meaning, the future is not preordained so there’s nothing to foretell. It happens when it happens.

Not just astrology, I find the equivalent of all these views among investment analysts. In investments, there are times when the one can forecast with some degree of confidence because the current trends can be expected to continue unchanged. There are often long periods when trends just extend themselves in a linear fashion.

There are other times, when there’s a break in the trend and the past stops being a good guide to the future. When trends are smooth, then these expectations are true and the forecasts are also true. However, when there’s a break then the future is not predictable. Which is exactly what is happening now.

Currently, there is no shortage of experts trying to predict when the economic crisis will end and growth will resume. I’ve seen predictions ranging from immediate (as in, the crisis has ended we just haven’t noticed yet) to one estimate that said it will ‘take a generation for things to be normal again’. Between the two extremes lie more frequent estimates like late 2009 or 2010 or early 2011. These ‘reasonable’ estimates occur with a greater frequency so they’ve started sounding reasonable.
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No matter how much you’ve read about trading, or how much experience you have as a trader, it is difficult to trade profitably in a volatile market environment like the one we are in now. A rising market is often perceived to reflect optimism and investor faith. Enthusiasm and rejuvenated interest in the markets rides high. Many investors have multiplied their money manifolds.

Now, is it time to quit? Will the bubble burst? The investor has many questions and very few options before him. Strategies for a rising market are crucial and much depends on the risk appetite of the investor.

Don’t sell into the panic. Don’t buy the greed. This is of course obvious to say, but harder to execute when it is actually happening. When you have extreme market conditions, the individual stock movements can be big and rapid, and they are not necessarily, and in fact, usually not at all, related to fundamentals or economics.

Will the upswing continue? This is a difficult question and much depends on the factors that contribute to the bull run. Many perceive the market to be over-heated and fear to set foot in it. Others view corrections as an opportunity to make quick money. But this calls for quick decision-making and considerable tolerance to risk.

The unfailing strategy is to buy great companies with long track records of rising stock prices and dividends. Pick them low and hold on. Over a long haul, such companies with good fundamentals will not fail you. It is not unusual to find some stocks faring poorly in a bull market and some doing exceptionally well in a bear market. A bull run implies a booming economy, low unemployment rate, high production of goods and low inflation.

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