Well, the market ended down. Surprised? I'm not. What happened in the news? Not enough.
- the Q4 employment cost index, which rose a smaller 0.7% (consensus +0.8%), the weakest overall rise since Q2 1999...
- Commerce Dept. showed 3.1% annual growth in advance Q4 GDP, less than the expected 3.5% growth rate, the data still suggest overall GDP growth in 2004 was the most robust since 1999 and still slightly above the 10-year trend...
- The GDP deflator (inflation) rose at a modest 2.0% annual rate, basically in line with economist's forecast of 2.1%...
You know, I have adjusted my game plan. It took me a few losses to get it through my thick skull that most equities are lethal right now. I moved some money into a fixed income mutual fund called EVERGREEN INCOME ADV (AMEX:EAD). Evergreen Income Advantage Fund will invest at least 80% of its assets in below investment-grade (high yield) debt securities, loans and preferred stocks, under normal market conditions. These securities are rated Ba or lower by Moody's Investors Service, Inc. or BB or lower by Standard & Poor's Ratings Group, or are unrated securities of comparable quality as determined by the fund's investment advisor.
The yield on the fund is 11%. I bought at $15.20. Here again, like the Nuveen Senior Income Fund, I don't expect too much capital appreciation or depreciation. My take is that it is not safe to be trafficking in equities now. It is important to keep a close eye on your capital...
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