What a quarter!

The return on risk has been outstanding in 2009. This chart shows the returns achieved by various financial assets in the third quarter of 2009. The higher the risk, the higher the return. For the S&P 500, this quarter was the strongest since the fourth quarter of 1998. Year-to-date numbers are equally impressive.

Note: Once again, the CNBC talking heads had it all wrong. Do you remember the ubiquitous doom and gloom of only six months ago? Recent experience demonstrates once again that mortals cannot predict the future even if they are on national television. A far better approach is to develop an investment strategy based on your goals and your circumstances and to faithfully execute that strategy over time. You may need to tweak your plan as your circumstances change, but don't let the fear of the crowd or the smooth prattle of the pundits draw you away from it.