Dangers of Chasing Past Performance

	Money Manager Monthly	WrapManager.com \| Contact Us
		May 2011

	In This Issue
	Dangers of Chasing Past Performance The Federal Reserve and Inflation Expansion Continues Despite Lower GDP

	Latest News

	Latest Performance Numbers Available for First Quarter 2011! Use our Money Manager Directory to request free research reports on hundreds of money managers. The research includes historical performance, rankings and comparisons to other money managers. Click here to access the WrapManager Money Manager Directory.

	Investment Quiz

	What was the S&P 500's dividend yield as of 3/31/2011? a) 1.89% b) 4.52% c) 0.45% d) 6.07% 2. How much are year-over-year profits up for the roughly half of S&P 500 companies that have reported earnings as of 4/29/2011? a) 46% b) 12% c) 26% d) 32% 3. What percentage of revenue for S&P 500 companies comes from non-US sources? (Not all companies report this statistic) a) 60% b) 30% c) 15% d) 50% Answers: a, c, b Source: Federated Investors, JP Morgan

MARKET COMMENTARY

Dangers of Chasing Past Performance

By Gabriel F. Burczyk, President & Chairman of the Investment Policy Committee

Choosing money managers is challenging and we believe investors often make two crucial mistakes during the process. The first is selecting managers based mainly on recent performance. It's like driving while looking in your rearview mirror - you have no idea what's in front of you. The second mistake is choosing managers who historically do not perform well in the market environment we expect to occur moving forward.

We'll take a look at Churchill Management Group's Premier Wealth strategy as an example to illustrate this concept which will hopefully provide you with some insight on a few ways to evaluate your current and future money managers.

Read On »

MONEY MANAGER COMMENTARY

The Federal Reserve and Inflation

Implications of the Latest Fed Meeting and Press Conference
BlackRock's Chief Equity Strategist for Fundamental Equities examines Ben Bernanke's historic press conference and the Fed's recent two day meeting. All told, their view towards the markets continues to be cautiously optimistic.
Click Here for BlackRock's Full Commentary

Looking at First Quarter GDP and Beyond
Money manager Alliance Bernstein dives into the first quarter GDP number and revises their full year GDP outlook.
Click Here for Alliance's Commentary

Important Perspectives on Inflation
Money Manager Lord Abbett slices and dices the inflation story in their May commentary.
Click Here for Lord Abbett's Full Commentary

The Fed Is Not Stepping On the Brakes
Wells Fargo's weekly commentary examines what the outcome of the Fed's two day meeting means for the markets.
Click Here for Wells Fargo's Full Commentary

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FINANCIAL TIDBIT

Expansion Continues Despite Lower First Quarter GDP

At the end of April, the US Bureau of Economic Analysis reported a first quarter 2011 GDP of 1.8%. This was less than desirable, but the basic pillars of growth remain in place.

The lower number was primarily a function of slower real personal consumption and continuing declines in residential investment. A large drop in government spending and increased imports also dragged on the headline number. Helping growth were business investment spending and continued inventory rebuilding.

As the chart below shows, we are still experiencing the economic expansion that started in early 2009. In fact, the US economy has recovered more output that was lost during the recession.

First Quarter GDP Growth

Source: JP Morgan Asset Management

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