Last night I watched The Curious Case of Benjamin Button. The movie sparked a lot of thought. If you watch it, and discuss the movie with someone close to you, it’s likely you both will get something different from the movie. It’s likely that you both will get more than one thing from the movie.

I’ll share a few thoughts of mine through Benjamin’s quotes. When I first heard the quotes, I didn’t immediately think about investing (to the delight of those close to me); it wasn’t until after the movie that I thought about the relationship between the movie and investing.

Take a look at a few of these quotes from the movie.

“You can be as mad as a mad dog at the way things went, you can curse the fates, but when it comes to the end, you have to let go.” I don’t think Benjamin was referring to the recent bear market, but, hey, we have to let it go. We can't go back and sell out in September of 2007 or buy in March 2009.

“Life can only be understood looking backward. It must be lived forward.” This quote reminded me of rearview mirror investing. So many investors -- including advisors and asset managers -- look at the past when trying to determine the future. I still believe in diversification and the long-term viability of the global economy, but we shouldn’t be fooled by past returns.

“We are defined by opportunities, even the ones we miss.” We can relate this quote to so many issues in life. Does anyone have an idea of what popped in my mind when it comes to investing? Leave a comment if you wish.

The Boston Company Asset Management, LLC has outlined a case for equities and active management in a recent research report. Keep in mind they are an active equity manager. Regardless, they make some good points.

The Boston Company points out a couple of compelling reasons to buy equities over the course of 2009, but my interest is in the fact that they make a case for active management rather than indexing. Many believers in active management will make similar arguments (including me to some degree).

The point is that when the current value of stocks (as measured by price to earnings ratio) is dramatically different from historical valuations, then portfolio managers that choose stocks (active management) will do better than those portfolio managers that simply track an index of stocks (passive management). So, does evidence of the above as written by The Boston Company mean that you should sell your index funds and buy actively managed mutual funds. Well, no.

Stick to the game plan you have put in place -- assuming you have a game plan. More on some suggested game plans in the near future. Until then, let us all know if you have a plan and if you are confident about your plan.

I've been blogging about the issues surrounding target-date funds for several months. Morningstar does an excellent job of summarizing the recent joint SEC and Department of Labor hearing regarding the funds.

Morningstar mentions that Joseph Nagengast of Target Date Analytics believes "...the only acceptable goal of target-maturity solutions is to get the participant to the retirement date." He also believes "...the glide path should stop gliding at the point of retirement and retirees' equity should be invested entirely in fixed-income vehicles."

I'm curious how many readers believe that target-date funds should be at 100% fixed income at the target date? I don't think retirement is the finish line. At the very least, the choice should be given to the fund company as to the equity/fixed income allocation. After all, consumers should have more options available and not be limited by regulations.

Earlier this year I blogged about the technology sector returns and warned against jumping on the bandwagon. Well, not only is the tech sector still on a rampage, the market had its strongest quarterly stock gains in more than 10 years.

After a poor first quarter of 2009, and “not as bad” economic news following a dreadful 2008, the market began rebounding in March and remained strong in April and May. According to Lipper, 98% of all equity and mixed-equity funds were in the green for the quarter ending June 30. The average equity mutual fund was up 19.77%, and 77 out of 78 equity classifications were on the plus side.

It’s a welcome relief from a painful 2008, but don’t forget about managing your portfolio risk through diversification -- probably a point that doesn’t need to be reiterated after such recent market turmoil.

Let’s take a look at some of the second quarter performance numbers*:

World Equity Funds +26.66%
US Large Cap Funds +15.86%
US Small Cap Funds +21.80%
US Dollar against the euro -5.84%
US Dollar against the pound -11.87%
Oil +40.74%

*Source: Lipper, a Thomson Reuters Company