Market Summary – Q2 2014
The year hit the half way mark with the major asset classes all showing positive returns. Real Estate funds soared in the second quarter, no doubt benefitting from new Fed Chairwoman Janet Yellen’s position to continue to use the Fed’s clout to keep interest rates low. Bonds also have enjoyed positive returns this year, confounding those who feared inflation and rising rates would erode bond prices. We wonder if the economic recovery no one believed is beginning to edge out the financial recession no one remembers. CNN Money displays a Fear and Greed Index1 in which six metrics are...
Read MoreMarket Summary – Q1 2014
It has been five years since the stock markets of the US and most of the world hit bottom and began an astounding recovery. On the heels (fins?) of our recent message highlighting how short our collective attention spans have become (see: Do We Keep Repeating Ourselves? emailed March 17th), we dusted off our quarterly review from five years ago to see what was capturing our attention. Here’s what we wrote on April 12, 2009: … The first two months of the year were the worst January and February on record for the US Stock market, while March was the best month since 2002. The four weeks...
Read MoreMarket Summary – Q4 2013
The unusually strong performance of US stocks in 2013 was a welcome surprise for investors who are following a simple buy-and-hold strategy and a source of exasperation for many professionals caught flatfooted by the steady rise in share prices. The S&P 500 rose more than 32% in 2013, its best year since 1997. The broader Russell 3000 index (which includes both large and small company stocks) did even better, gaining 33.55% in 2013. This chart also reminds us there was a steady chorus of worrying media headlines throughout the year. We entered the final three months of 2013 with the US...
Read MoreMarket Summary – Q3 2013
The Royal Swedish Academy of Sciences announced on October 14, 2013 that Eugene Fama, Professor of Economics at the University of Chicago will share in this year’s Nobel Prize for Economics.* We congratulate Gene Fama on the recognition he has achieved. It was his research and teaching along with co-author and collaborator Professor Kenneth French ( Dartmouth) on efficient markets and Small Cap and Value investing that provided the insight and inspiration to David Booth who went on to found Dimensional Funds Advisors (DFA). Dr. Booth earned his PhD under Professor Fama in the early...
Read MoreMarket Summary – Q2 2013
The US Stock market continued to deliver strong gains this past quarter with the broader index (as measured by the S&P 500) gaining almost 14% year to date through June 30th and ahead almost 3% for the quarter. As it happened, most of the other asset classes we invest in were not invited to the party and generally lost ground over the past three months. Some of the safest investments were hardest hit such as bonds – which lost value as interest rates rose. Treasury Inflation Protected Securities, also known as TIPS, lost over 7% for the quarter, the majority of which occurred in...
Read MoreMarket Summary – Q1 2013
The year got off to a great start for equity investors with the US Stock Market at all time highs at quarter end. What’s not to like? The three legged stool of investor well being is on firm ground once again: housing appears to be recovering faster than expected; unemployment has continued to fall, and, as the US Stock market hits new all time highs, it finally feels safe for millions of workers to open their 401k statements again. As always, opinions differ. Ask a bull and he’ll tell you the market is cheap, citing rising corporate profits, below average price earnings ratios and...
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