The S&P500 was up just 0.22% in June, taking a breather from the recent sharp rise off the bottom. Tech stocks were much stronger with a 3.42% climb in the Nasdaq. Small cap stocks were up 1.47% while government bonds climbed 0.77% as the rise in interest rates in recent months subsided, probably just in time to prevent more damage to real estate markets. ...read the rest of this article»

Even after May’s 5.6% jump in the S&P 500, stocks are still pretty cheap - with a few ifs: if home prices stop falling and if the economy starts to recover in the next few months and if corporate earnings reverse course and head back to all-time highs. Of course, these are big ifs, and we think (at best) the market is going to take a breather and wait for the “green shoots” to turn into actual plants. ...read the rest of this article»

Up, up, and away. You’d almost forget the economy is, at best, flat, and, at worst, is taking a pause before another plunge. (We’re in the “flat” camp incidentally.) The S&P 500 was up just shy of 10% in April, a 9.56% gain that beat the Dow’s 7.56% for the month. Small-cap stocks led the rise with a 15.46% monthly gain, while the tech-heavy Nasdaq was up a bold 12.46%. Longer-term government bonds continued to collapse off their bubble-like boom and delivered a negative 4.83% return for the month. Of course, if we get an even deeper recession the government-bond boom will likely return. ...read the rest of this article»

If the last six weeks in the market are any indication, the panic in the financial markets could be behind us. While getting another 25% or more out of stocks may require the economy and housing market to stop sliding, investors seem comfortable that we’ve stepped away from the precipice for now, and that apparently the drop below Dow 7,000 was panic-based. This move could be a dead cat bounce, or a suckers rally, or some other term used on Wall Street by people who incorrectly called the markets direction. ...read the rest of this article»

The stock death spiral continues with double-digit declines in most major indexes in February. The Dow was down 10.66%, the S&P 500 lost 10.65% (for the worst February return since 1933), and the small cap Russell 2000 fell 12.15%. Foreign stocks dropped by about the same magnitude (or rather craptitute…) The tech heavy (and bank-lite) Nasdaq was down a mere 6.68%. Bonds were near flat with the aggregate bond index down 0.38%. Not helping matters was the U.S. Government, which of late appears to be reducing confidence and adding confusion and uncertainty. Investors are starting to realize the current problem doesn’t fix easy. ...read the rest of this article»

2009 is starting off even worse than 2008. In January, the S&P 500 fell by 8.41%, with a similar drop in the Dow of 8.65%. Small cap stocks fared even worse with an 11.12% slide in the Russell 2000 Index, which measures smaller cap stocks. Even the mighty long-term government bond slid a sharp 8.5%, ending last year’s meteoric run. Tech stocks were relatively strong with a 6.3% drop in the Nasdaq and a mild 2.29% drop in the larger cap-oriented Nasdaq 100. ...read the rest of this article»

The Conservative Portfolio climbed 1.27% in January.

2009 is starting off even worse than 2008. In January, the S&P 500 fell by 8.41%, with a similar drop in the Dow of 8.65%. Small cap stocks fared even worse with an 11.12% slide in the Russell 2000 Index, which measures smaller cap stocks. Even the mighty long-term government bond slid a sharp 8.5%, ending last year’s meteoric run. Tech stocks were relatively strong with a 6.3% drop in the Nasdaq and a mild 2.29% drop in the larger cap-oriented Nasdaq 100.

Foreign stocks fared slightly worse than U.S, indexes though some emerging markets were relatively strong after a big beating in 2008. The real trouble was (once again) in financials, notably banks, where the typical bank stock was down some 30% for the month. REITs, or real estate investment trusts, where down almost 20% in January as well, as the real estate bubble just keeps on deflating, wiping out all leveraged players in its wake.

Government spending and support of the collapsing economy has gone into overdrive and can now only be measured in the trillions. Apparently we will find out once and for all if a depression can be prevented by massive government spending. Many major banks’ futures are uncertain at best. Without bailout money, most of the top ten banks would surely have already failed. Why all these bankers didn’t see the trouble brewing in real estate remains a mystery. Surely some deserve to lose their banks, and their jobs. One problem is that for every $1 in government spending the fear factor of an economy in peril is causing perhaps another $1 to not get spent as consumers panic about the future. Investors are just as scared; favoring cash over stocks at levels we’ve never seen. We’d like to see one more large drop and will consider shifting more to stocks on it.

On the positive note, our average portfolio was down 2.39% or less than half the S&P 500’s drop in January 2009…

Nakoma Absolute Return (NARFX) delivered a positive return of 1.5% in a bad month for stocks, a nice showing and more of what we want to see. While we were glad this fund didn’t tank like 95% of the other funds out there, we still weren’t that impressed with the -4.34% return in 2008 – though this return beats almost all stock funds and some bond funds in 2008.

Janus Global Research (JARFX) had another good month relative to the market with a 6.27% drop, helping make up for a bad return during the market’s worst months last year.

https://maxadvisor.com/mt/mt.cgi?__mode=view&_type=entry&id=791&blog_id=14

At least the market ended the year on a positive note. The S&P 500 was up a measly 1.06% in December, but this not-so-sharp turnaround means the S&P 500 fell a ‘mere’ 37% in 2008. The Dow fared better for the year, with a 31.93% drop, but managed to retreat 0.39% in December. The Nasdaq was down just over 40% for the year and up 2.7% for the month, while the Russell 2000 small cap index did manage to get hot with a 5.80% return for the month, keeping the total loss for the year down to 33.79%. Foreign indexes were down over 40% in ’08.All of our model portfolios beat the S&P 500 in December and for the year. ...read the rest of this article»

Compared to October, November was a gangbuster month for stocks. The S&P fell only 7.18%, the Nasdaq and Russell 2000 dropped by double-digits, and the Dow posted a 4.86% loss. Government bonds were the only true winner. The Lehman Brothers US Government Long Bond Index gained a blistering 11.78% as interest rates on government bonds plunged to record lows caused by investors panic buying the safest investment around. Too bad Lehman didn’t own more government bonds - they might still be in business. What did Lehman load up on near the end? Commercial real estate – REITs were about the worst performing area last month with a roughly 25% drop. ...read the rest of this article»

October was a month where there was, to quote Martha and the Vandellas, ‘nowhere to run to, nowhere to hide’. The S&P 500 dropped a whopping 16.8% – and would have been down far more were it not for the sharp 1,000+ point surge in the Dow during the last few days of the month. The S&P 500 is now lower than it was when we launched our model portfolios in April 2002. With this backdrop, we’re satisfied with our 27% to 71% since inception return range across our model portfolios. ...read the rest of this article»