Stocks' tug-of-war

NEW YORK (CNNMoney.com) -- Stocks have ended four of the last five weeks higher, leaving the Nasdaq and S&P 500 at 18-month highs and the Dow industrials not far from such levels.

Since bottoming at a 6-year low on March 9 of last year, the Nasdaq has gained 87%. Since bottoming at a 12-year low on the same day, the S&P 500 has gained 70% and the Dow has gained 62%.


But the majority of those gains happened last year and another leg up for the market could prove elusive, at least for the time being. With just two weeks left in the first quarter, investors are set to wade through a period that's devoid of corporate profit reports and still fraught with worries about the outlook for the economy.

"We're in a volatile period right now," said Kevin Mahn, portfolio manager at Hennion & Walsh. "2010 is going to be a transitional year and I think both stock market and economic growth will be muted."
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Although stocks are up modestly, following 2009's big stock rally, it has been a challenging start to the year. So far, Wall Street has seen expectations for a robust recovery bat up against the reality of a still hard-hit labor market and housing sector, not to mention the fallout from huge U.S. and global deficits.

But some positives have also emerged, including last week's surprisingly strong retail sales report and indications that manufacturing is recovering. The push and pull between weaker and stronger reports has enabled stocks to eke out enough gains to get the major gauges back to levels not seen in 1-1/2 years. But the next push is likely to be a lot harder.

This week brings a series of reports on manufacturing, as well as the latest on the job market, the housing market and inflation. The Federal Reserve meets Tuesday to discuss interest rate policy and the outlook for the economy.

Gold investment

Lately, it is a little bit confusing for us to make an investment. Whenever economic still in unstable situation, and then stock market still can't predict clearly. For a few person like me, who didn't want to take a high risk in investment, I'd rather to put it in gold as investment.

We can find many varieties investment in gold. Investment in gold can be done directly through bullion or coin ownership, or indirectly through gold exchange-traded funds, certificates, accounts, spread betting, derivatives or shares. Just take any of your preference in investment on gold


Investors generally buy gold as a hedge or safe haven against any economic, political, social or currency-based crises. These crises include investment market declines, currency failure, inflation, war and social unrest. Investors also buy gold during times of a bull market in an attempt to gain financially. It doesn't mean gold price will always stable, it is driven by supply and demand too.

But many of investor believe that gold prices will continue to rise and thus that they can gain financially, and/or as a hedge or a perceived safe haven against any economic, political, social or currency-based crises. Of course prices can fall as well as rise, so investors must make a best guess on what the future holds. So just take your choices

Why invest in convertible bond?

The spreading global recession has caused many investors to stay away from the markets. Many investor feel worry about volatile markets, in this situation , convertible bonds could be a viable instrument.

Convertible bons re a hybrid security with debt and equity-like feature. Like a normal bonds, convertible bonds pays coupon to their holder and there is option for holder to convert the debt into equity of the issuing corporation.

Why invest in convertible bonds
Investor can participate on appreciation of the company stock's price. If the share rise above the predetermined price, investor can convert the bond into share to take profits. If the shares drop below the conversion price, investor can wait until mature and pay out the par value. Meanwhile the investors continue to receive regular income from coupon payments. As such, convertible bonds can be considered a defensive way to invest in equities



Convertible bonds are less risky than stocks of the same companies because they ranked senior in company's capital structure. They have financial claims on the company's assets prior to stockholders if the company goes under. In addition, the interest is paid before any stock dividend. Convertible bond holders can at least get interest income even if the company's earning decline and can not afford to pay any dividend

on the other hand, they are regarded as riskier than conventional bonds since a decline in the share prices of the issuer can negatively affect their value. Their claims on assets during liquidation also come after conventional bond holders have gotten thier money back