The S&P 500 dropped  8.91% in September, which was the second-worst single month for the index since we launched our model portfolios in April of 2002. (The worst month ever was September of that same year). While the Nasdaq was down just over 12%, investors in U.S. markets had a (gulp) relatively easy time of it. Foreign markets fell about 15% in September with emerging markets down around 20%. ...read the rest of this article»

August was a good month for U.S. stocks and bonds, a crummy month for …well just about everything else around the world. So far, September is not turning out as peachy. ...read the rest of this article»

You have to be impressed by the government’s recurring ability to stop the market from completely falling apart. In July, we most certainly would have seen the demise of Fannie and Freddie had it not been for the swift reassurance to the market that the “S” in GSE (Government Sponsored Entities) not only stands for “Sponsored” but in fact stands for Supported, maybe even Saved. ...read the rest of this article»

The strength we saw in most stock indexes in May turned to weakness in June. Before all was said and done the Dow was down around 10% for the month, with other broad indexes following suit. The Nasdaq dropped 9.11% in June, the Russell 2000 small cap index 7.7%, and the S&P 500 8.43%. With July’s continued carnage we’re now in bear market territory – a 20% drop from a market peak – in all of the big indexes. None of our model portfolios was down more than 5% in June. ...read the rest of this article»

In May the hope that the worst was behind us in the mortgage crisis and in financials evaporated. Financial SPDR (XLF) – the financial sector ETF – was down 6.08% in May, while the KBW Bank ETF was down almost 8%. Oddly, REITs (real estate investment trusts) bucked the trend with a slight increase in the category as a whole, as investors continue to think this part of the real estate market won’t sink much more than it already has. ...read the rest of this article»

The growing belief with investors is not only that the worst of the credit crisis is behind us, but that it is in fact almost over. If home prices do not decline any more (fat chance) this belief would be true. ...read the rest of this article»

By mid-March the market was not looking good, sliding to new lows as financial services stocks continued to suffer - but once again things turned around and ended basically flat for the month. The S&P 500 was down 0.43% in March – the 5th straight monthly decline. Other indexes did better; the Dow was up 0.12%, the Nasdaq 0.34%, and the Russell 2000 small cap index 0.42%. Higher quality bonds were up slightly as well, while riskier corporate debt and most of the mortgage bond market slipped. ...read the rest of this article»

February marked yet another negative month for stocks – the fourth in a row. The Dow was down 2.75%, the S&P 500 3.25%, the Nasdaq 4.95%. Developed market foreign stocks were up about 1% - 2%, largely on dollar weakness. Government bonds eked out a small gain while lower quality debt continued to slip. While all but one of our model portfolios was down, none fell as much as the major stock indexes. ...read the rest of this article»

All of our Powerfund Portfolios outperformed the major stock indexes in January – except Daredevil, down just a bit more than the Dow’s 4.5% drop. While our relative performance was good, most of our portfolios, save Safety, were still off significantly. We expect to clock another year beating the S&P 500 by increasing our stock fund allocations as the market continues to weaken. ...read the rest of this article»

In the end, 2007 produced a lot of volatility but not much in returns. The S&P 500 was up just 5.5% for the year. Keep in mind no risk low fee money market funds returned about as much - Vanguard Prime Money Market returned 5.17% in 2007. The story was better for Dow and tech stocks. The Dow was up 8.89%, the Nasdaq was up 9.82%. Small cap stocks were the real losers, down 1.57% for the year, though this doesn't tell the story of how smaller cap value stocks underperformed, down almost 10% in 2007 (small cap growth was up 7.05%). Safer bonds were a decent place to be in 2007, with longer term government bonds returning just shy of 10% and the total bond market up about 7%. ...read the rest of this article»