John Edwards III Chat on AOL

Markets Editor John Edwards chats about stock splits, Y2K, the Fed and more.
Author:
Publish date:

SageCrystl:

Sage is proud to introduce Mr. John Edwards, markets editor for TheStreet.com. Thanks for joining us today John.

Jedwards:

Thanks. Great to be here.

Question:

Do you think diversification is a good investment strategy for the individual investor, and why?

Jedwards:

Diversification is definitely better for investors than being limited to a single category, because that can help to insulate you from losses in a particular group.

Question::

Is there any fundamental reason for investors to get excited about stock splits?

Jedwards:

No, not really. A 2-for-1 split, for example, simply means there are twice as many shares worth half as much each. A stock split can signal a certain degree of confidence among the management of a company, but it is not a fundamentally important event.

Question:

John, got an educated guess as to why Etrade has been lolling?

Jedwards:

While I can't comment on individual stocks, the online brokerage group has been hurt by concerns about slowing growth in the number of new users.

Question:

What kinds company(s) do you feel will be hurt the most due to Y2K related fears

Jedwards:

My understanding is that utility companies are among those struggling most to comply with Y2K concerns. But most U.S. industries will be just fine.

Jedwards:

The real concern about Y2K is overreactions and hoarding by people and companies overly worried about the problem.

Question:

Why would a stock like Yahoo trade down after great earnings?

Jedwards:

Yahoo! and some other companies often run up in advance of their earnings reports, and then retreat once the anticipation turns to reality.

Question:

Will the PC sector ever "compute" again?

Jedwards:

It may, but there are some structural problems that make it a tough business. Not to single anyone out, but a company like Dell seems to have a good thing going with a more direct-sales-oriented model.

Question:

When do you expect this market to crash?

Jedwards:

There's no way I or anyone else can have a reasonable forecast of when a crash might come. The nature of crashes is that they are unpredictable.

Jedwards:

But we all know gains like those we've seen in the last few years can't continue unabated forever. Earnings growth just can't support it, despite being strong lately.

Question:

Are global and emerging markets too risky for the average investor to get involved with?

Jedwards:

Many of them are. Emerging markets can be extremely volatile and are often subject to the whims or fears of currency speculators, whose moves are often dictated by mob psychology more than by fundamentals.

Jedwards:

It's important to do a lot of research before investing anywhere, but that's particularly true in emerging markets.

Question:

do you expect the FED to make another move on interest rates before year end?

Jedwards:

If we continue to see the kind of trends we've been seeing in certain economic indicators, I would say the Fed has at least one more rate hike left in it this year.

Jedwards:

It's interesting, though, that the depressed level of agricultural commodities suggests that widescale inflation remains in abeyance.

Question:

Should a 75-year old have 75% of his/her investments in bonds?

Jedwards:

That could be a fine strategy, but much depends on the person's individual financial situation and needs. One would do best to consult a professional financial adviser on that, rather than a professional journalist.

SageCrystl:

Thanks for joining us today John.

Jedwards:

Thanks very much for having me. See you next week -- and keep reading

TheStreet.com

!