| Asset allocation can help protect your portfolio
Over time, the value of stocks can go up and down. Bond prices fluctuate with interest rates, as do other types of fixed-income securities such as certificates of deposit and investments in money-market accounts. Predicting which investment vehicles are likely to perform better than others at any given point time is next to impossible. So how do you choose investments for your portfolio? The answer is to follow a risk-reduction strategy called asset allocation. By dividing your dollars among a variety of investments, you can decrease the likelihood that all the investments in your portfolio decline at the same time. Of course, by the same token, it's also unlikely that every investment in your portfolio would go up at the same time. Essentially, asset allocation diversifies your portfolio among several distinct asset classes.
Troops shell Somali market, killing 11
At least 11 people were killed in Mogadishu when troops at the Villa Somalia presidential palace returned fire against Islamist insurgents who attacked it with mortar bombs, witnesses said. President Abdullahi Yusuf was there at the time, an aide told Reuters, but no one in the hilltop compound was hurt. Residents said Ethiopian soldiers guarding Yusuf then launched shells at the city's Bakara Market, killing a number of people. "Seven people including a woman died in the money changers' area when more than eight mortar bombs struck several parts of Bakara," shopkeeper Muse Ahmed told Reuters by telephone. "Four people were killed inside the market's food section," said another market trader. The market is notorious for its open-air arms bazaar, and has been the site of frequent skirmishes between guerrilla fighters and government troops backed by Ethiopian forces.
Market Report: JPMorgan raises BearStearns bid
On Monday, JPMorgan raised its initial bid of $2 per share for struggling investment bank Bear Stearns to $10 per share. By increasing the bid, JPMorgan quelled any thought of a shareholder revolt, which threatened to jeopardize the deal and send Bear Stearns into bankruptcy.
In the beginning of March, Bear Stearns' (BSC) stock price was trading in the mid-to-high 70s. Two weeks ago, on Friday, March 14, the stock opened at $54.24 and closed at $30. The following Monday, the investment banking giant opened at a paltry $3.17, down nearly 95 percent from just one trading day before.
Many of the top shareholders of Bear Stearns, some of whom saw their personal fortune plummet in the two-day crisis, cried foul when the Federal Reserve pushed JPMorgan's $2 bid, which vastly undervalued the firm.
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