What's New

Missing the Last Hurrah: Our Recipe for Success

11/04/09 - Powerfund Portfolios Feature Article

Fund managers are arguably quite skilled at determining relative valuations. For example, an emerging markets manager can tell whether a Brazilian telecom company is a better deal than a Mexican cement company, but he'll never sell his emerging markets stocks after realizing emerging markets may be in a bubble. That's our job. We pull away the punch bowl before the market gets too drunk.

September 2009 Performance Review

10/20/09 - Powerfund Portfolios Performance Review

The rebound continues. How time flies. It almost seems like years ago – not a mere six months – that the financial world was crashing down around us. If this continues we’ll be setting new records in how quickly bad times can be fixed by merely reinflating new bubbles. The real estate bubble took a few years to pull us out of the tech bubble / Nasdaq crash.

Zero — The New Black

10/02/09 - Powerfund Portfolios Feature Article

Recently, fund investors have abandoned money market funds and similar near-zero interest investments, like short-term government bonds, in search of higher returns. Of course, being overly cautious is usually a bad idea. But trying to capitalize on irrationally high returns on higher-risk investments while eschewing safer investments isn't very smart, either.

August 2009 Performance Review

09/17/09 - Powerfund Portfolios Performance Review

In August, just about everything went up. The S&P 500 rose 3.6%, pushing the year-to-date return on the market further into double-digit territory. The Nasdaq, which had been leading from the market low in early March, was up just 1.55% for the month. Small-cap stocks were somewhere in the middle with the Russell 2000 index gaining 2.87%. Even bonds had a good month as interest rates turned back down in the face of signs the economy was on the mend. Longer-term government bonds were up 1.78%, while the total bond market posted a just over 1% gain.

Broad View

09/03/09 - Powerfund Portfolios Feature Article

Stocks should be the best performers over the next decade. This prediction has less to do with our overall outlook on the economy, market, and valuations, and more to do with where investors are putting their money. Investors often shift money to broad categories and specific areas after a hot streak and shortly before a period of under-performance starts.

July 2009 Performance Review

08/19/09 - Powerfund Portfolios Performance Review

A listless June was quickly forgotten thanks to a hot July. The S&P 500 was up 7.58% last month with similar gains in other stock indexes. The Dow climbed 8.75%, the Nasdaq gained 7.82% and smaller-cap stocks rose 9.63%. Treasury bonds returned 0.77% as any interest rate increases turned out to be temporary. Oddly, investors seem pretty confident the economy is turning around, yet don’t seem to think interest rates are going to take off any time soon, hence the low rates on Treasury bonds.

At Some Point

08/03/09 - Powerfund Portfolios Feature Article

From the March low (hit just a few days after our last buy in our model portfolios), the market is up around 50% - among the greatest returns in a few months ever. Makes one wonder how much faster stocks could possibly go up in a short time period. What if the government did what everybody wanted it to do? Perhaps good and bad government policy is overrated as it pertains to stock prices.

June 2009 Performance Review

07/18/09 - Powerfund Portfolios Performance Review

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.

Trade Talk

07/03/09 - Powerfund Portfolios Feature Article

We manage the MAXadvisor Powerfund Portfolios as contrarian investors. When fund investors are panicking and taking money out of stock funds, we try to increase our allocations. When they get their nerve back, often after a big rally, we tend to cut back. This doesn't make gut sense; stocks sure seem safer today than back in early March when the 'D' word (Depression) was being bandied about, but that's the irony of the stock market: It has more upside potential when it seems to have more downside risk and more downside risk when it seems to have more upside.

June 2009 Trade Alert!

06/30/09 - Powerfund Portfolios Trade Alert!

Our roughly 60% return in four months (double the overall market) in the Financials Select Sector SPDR ETF (XLF) marks a good exit point from financial services stocks. While financial stocks may have more upside, the bargains are gone and we don’t expect the sector to outperform the market going forward - the main reason to own a sector fund in the first place. For the time being we are increasing our bond allocation even though bonds are not screaming buys at current yields. We think we may see some more interesting stock fund opportunities in coming months.