When most people think about the capital markets today they think of trading securities – buying, selling, price changes and how to anticipate them. But trading is a secondary function of capital markets. Their primary purpose is to enable savers to invest their money in the most productive businesses to earn the greatest returns through dividends and increases in value over the long term, thereby maximizing overall economic growth and employment. Such savers or investors are interested in the factors that lead to long-term growth in their dividends and capital appreciation – such as predictable long-term growth in revenues, profit margins, return on equity invested, opportunities for reinvesting capital. Equally importantly, they are interested in price-earnings ratios and other comparative measures of the pricing and risks of their investments. But how often do we hear a discussion of these topics in today’s business media? The issue of trading versus fundamentals-based investment is central to the theme of two of the articles in this issue of The Analyst: “High-frequency Trading” which examines a pervasive form of day-trading that ignores fundamentals and now accounts for 30 to 70 percent of the transactions on the world’s leading stock exchanges and “Are We Trading Ourselves to Death?” which explores the question of whether the quality of our investment decision-making is being compromised by technology-based trading systems.

Two peculiarities of our capital markets today are record low interest rates (near zero in some cases) and widespread acute economic and monetary uncertainties. In this environment it is not surprising that investors are anxiously looking for alternatives to bonds and stocks. Articles in this issue address two such investment alternatives: silver (a follow-up to an article on investing in gold in our last issue) and income-producing real estate. We also have an article about China, a country that has largely avoided the rest of the world’s current economic problems (hitherto at least), in which we review the new 5-year growth plan of the world’s second largest economy.

We would like to extend our congratulations to all the new CFA graduates who are members of our society, many of whom attended our new charterholders’ reception in January, one of the highlights of our programming year. We asked one new charterholder to share with us his goals and aspirations and his responses are included in this issue.

Also to be found in the pages that follow are book reviews, the results of our recent website polls of members’ views on current issues in the investment world and an article outlining the features and benefits to members of our society’s new offices at 120 Adelaide Street West.

We hope you will find this issue of The Analyst interesting and thought-provoking and, as always, we welcome your views.