July 2017 Market Review
US sectors Financials, Healthcare and Technology continue to drive the returns for US growth stocks. Consumer stocks and energy stocks are lagging. Value equities continue showing small increases except small value which is down .5% for the quarter. The growth equities are up 6.2% for large, 5.2% mid, and 5.5% small for the quarter.
In international markets, emerging markets continues to beat all US equities rising 9% for the quarter. Developed international markets increased 6.5% slightly beating large US growth equities. We expect international exposure to help the portfolio due to continued fundamental drivers for companies in those regions.
Despite low inflation, there is a good chance the Fed will continue to raise interest rates at its current slow pace. Low unemployment, solid jobs growth and building a policy cushion for the next downturn remain our best guesses for their motivation to raise rates. This is despite lackluster GDP growth and, as mentioned, historically low inflation. We will be on the lookout for an inverted yield curve: short term rates rise above long term rates. That is usually a harbinger of a recession.
There is a tendency to become complacent when volatility is low, growth is positive and inflation is low. We accept that there are risks that can be identified but not quantified in advance. There is a tendency to underestimate risks in this environment. Rebalancing the portfolio is the best risk management tool in this case. We sell some of the asset classes that have increased and use the proceeds to buy the underperforming asset classes. We rely on the fund managers to buy quality companies in each asset class so that we are selling high priced quality companies and buying low cost quality companies. This discipline mitigates the emotional tendency to hold on too long or chase returns.
It was a down quarter / year-to-date for almost every asset class. For US equities, only growth stocks held on to their gains with large growth up
- Since 1950 there have been 59 different 10 year periods (rolling periods). The S&P 500 has produced a positive total return
3/15/2018 The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in February on a seasonally adjusted basis after rising 0
1. Returns for 10 year time horizon:
- Global Equities: 3.9% total return (due to
For at least the second January in a row, we can report a strong market, strong economy and good prospects for the new year. Unlike last January,
The second longest bull market in American history continues. In a couple months we will mark the 9th anniversary of the low point for
The US market seems to be excited about corporate tax cuts and is charging ahead. Interestingly, value stocks kept up with growth over the past
US economic growth recorded its second straight quarter of 3% GDP growth, earnings are beating estimates, interest rates and inflation are low. It
It was a great three months for equity markets. International stocks continue to shine. Emerging markets increased 7% for the quarter and are up
The US economy is still strong. Jobs are growing, unemployment is very low partially due to the historically low labor participation rate,
US sectors Financials, Healthcare and Technology continue to drive the returns for US growth stocks. Consumer stocks and energy stocks are lagging
US growth equities continue to rise for the year. US value equities are barely breaking even. The growth equities are up mid-single digits for the
Two groups have done well this year: mega caps (like members of the Dow Jones Industrial Average) and lower profitability growth companies (per
Looking back it’s been a good couple of months and quarter (Dec – Feb). US growth equities are beating their value
The consistent performance of US small cap equities and to a lesser extent value stocks (all sizes) has aligned the returns for the quarter and
The year and the quarter come to a close and if you look at the one year returns it looks very orderly but we know it wasn’t. All the US equity
GDP for the third quarter was revised up from 2.9% to 3.2%. Unemployment is below 5%. Initial jobless claims have been below 300,000 for the
Portfolios allocated across several asset classes held on to their year to date gains and in all but the most conservative case have exceeded the
Value investing continues to lead the way for US equities. Large cap growth is the laggard so far this year and this may be the first year in
August was hot outside but the equity markets were only lukewarm. The reversion to longer term performance averages continues which means value
If you could avoid the daily news and market fluctuations, it was a good quarter. It was good even if you did follow the news. It just may not
Value equities especially US continue to outperform growth equities. Large value is up 6.8% year-to-date vs. -2% for Large growth. Small value
Consumer Price Index – April
The consumer price index for April (released May 17th) showed a .4% increase in
US value equities have now consistently outperformed their growth brethren this
If emerging markets could speak, they might be saying, “I told you so.” MSCI Emerging Markets Index has been at the bottom or next to the bottom
Wednesday, March 16th was a big day for macroeconomic news. The Consumer Price Index (CPI) also called the headline inflation rate was
US value stocks have continued to outperform their growth counterparts this year but it is masked by the fact that all US equity asset classes are
January was a wild month in the equity and bond markets. There are many wild predictions being thrown around both optimistic and pessimistic.
01/22/2016As we write this, the S&P 500 is climbing again. Its price is within a couple points of an all-time high set on February 28,01/04/2016
2015 In Summary
As we scan the four pages of year-end 2015 index returns that Morningstar generates, we see one US12/02/2015
Following a mid-month decline, U.S. equities rallied to end November in the black, as both the Dow Jones Industrial Average® and the S11/05/201511/02/2015
The US equity market has started the recovery process from the correction which began09/14/2015
FYI, 3rd quarter estimated tax payments must be postmarked by tomorrow, 09/15/2015.09/01/2015
Last week’s market volatility offered investors06/01/2015
On a rolling03/06/2015
Stocks are again near record highs after a dismal January, echoing 2014. The U.S. economy remains in growth mode despite a decline in the02/04/2015
January 2015 is now in the books. Let’s reflect on the beginning of the year. For portfolios, it was bad for equity prices and good, not great,01/13/2015
The foundation of personal finance is saving. Specifically, we mean the establishment of an emergency fund. In order to guarantee that this key08/20/2014
Inflation is not dead!
But it isn’t grabbing headlines, either. The Bureau of Labor Statistics of the Department of Labor released the07/30/2014
I had a professor at the University of Georgia who taught business law. We learned enough to be dangerous and know that we needed a lawyer to