The Conservative portfolio was up .68% in March. Stocks were up in March, with the S&P 500 and Dow up about 1% and 1.5% respectively. Long-term US government bonds were down about 1.2% in March, but all our bond fund choices were up in this portfolio. We don’t feel longer term US government bonds are the place to be right now. If rates climb fast, our bond fund choices will likely lose money also, just not as badly as we think government bonds will fall. We’re considering investing in a variable rate fund here shortly.
REITs and Junk bonds were strong. We keep waiting for REITs to fall, but they don’t which makes us which we had larger allocations than 5% to the sector. We used to recommend higher allocations to REITs, but after they ran up in price we pared back. Today’s low interest environment makes REITs yield hard for investors to pass up, keeping prices high. We’re not going to increase allocations here without a significant dip.
Junk bonds have been on a solid run for a few months now, and are currently one of the top asset classes. We do not plan on increasing weights here.
The only fund that was down in the portfolio was the Vanguard Dividend Growth fund, which dropped .48%. While we are not particularly enamored with this fund, which was the result of the conversion of their old Utility Income fund, the tax loss carryforward on the books as well as the low fee will make this one of the best dividend income funds over coming years. We own this fund in this portfolio for income and growth, we don’t want to see most of the meager stock dividends going to management fees.
Utilities seem to be turning around, with our just added American Century Utility Income fund up 1.75%, outpacing the market. This is one of the few areas where an income seeking investor can get a decent yield, but the risk is higher than with bonds. If these stocks go nowhere over the next decade, you’ll still make more in yield than you will owning government bonds which recently paid under 4%.
The Aggressive growth portfolio was up .34% in March. Stocks were up in March, with the S&P 500 and Dow up about 1% and 1.5% respectively. Long-term US government bonds were down about 1.2% in March.
The Fidelity New Markets Income fund jumped another 2.12% locking in emerging market bonds as a top asset class over recent years. The last 10 years have been spectacular for emerging market debt and terrible for emerging market equity, we may shift around more to the out of favor equity.
Artisan International Small Cap has been our strongest equity fund in this model portfolio – our weakest model portfolio over the last 12 months. Last month the fund was down -.31%, as foreign markets slipped.
Junk bonds have been on a solid run for a few months now, and are currently one of the top asset classes. We do not plan on increasing weights here. Our junk bond choice for this fund, the Northeast Investor fund has not performed well in recent months compared to more aggressive funds. We still like the fund but wonder if we should move it into more conservative portfolio we run and put something a little more aggressive here. This is still one of the best long-term junk bond funds in the business, low fee and well managed.
Japan falls again, taking the T. Rowe Price Japan fund down 1.89%. This fund recently lost a manager but we don’t know of any better funds for this portfolio right now. We’re considering the Fidelity Small Company Japan fund mostly to increase risk and return here, but we may just make the move in our daredevil portfolio. Possibly the Vanguard Pacific Stock Index fund would be a replacement for this portfolio if we don’t like what happens at the T. Rowe fund in the future.
The Bridgeway Ultra Small Tax Adv fund has been our best stock fund performer over the last year for this model portfolio, and was up another 1.82% in March.
Telecom has stalled after coming back a bit in recent months, and the Gabelli Global Telecom fund was down .52% in March.
Emerging market stocks were weak, in contrast to emerging market bonds, which were strong. The newly added SSgA Emerging Markets fund was off –2.47% for the month.
March 2003 performance review
The Conservative portfolio was up .68% in March. Stocks were up in March, with the S&P 500 and Dow up about 1% and 1.5% respectively. Long-term US government bonds were down about 1.2% in March, but all our bond fund choices were up in this portfolio. We don’t feel longer term US government bonds are the place to be right now. If rates climb fast, our bond fund choices will likely lose money also, just not as badly as we think government bonds will fall. We’re considering investing in a variable rate fund here shortly.
REITs and Junk bonds were strong. We keep waiting for REITs to fall, but they don’t which makes us which we had larger allocations than 5% to the sector. We used to recommend higher allocations to REITs, but after they ran up in price we pared back. Today’s low interest environment makes REITs yield hard for investors to pass up, keeping prices high. We’re not going to increase allocations here without a significant dip.
Junk bonds have been on a solid run for a few months now, and are currently one of the top asset classes. We do not plan on increasing weights here.
The only fund that was down in the portfolio was the Vanguard Dividend Growth fund, which dropped .48%. While we are not particularly enamored with this fund, which was the result of the conversion of their old Utility Income fund, the tax loss carryforward on the books as well as the low fee will make this one of the best dividend income funds over coming years. We own this fund in this portfolio for income and growth, we don’t want to see most of the meager stock dividends going to management fees.
Utilities seem to be turning around, with our just added American Century Utility Income fund up 1.75%, outpacing the market. This is one of the few areas where an income seeking investor can get a decent yield, but the risk is higher than with bonds. If these stocks go nowhere over the next decade, you’ll still make more in yield than you will owning government bonds which recently paid under 4%.
The Aggressive growth portfolio was up .34% in March. Stocks were up in March, with the S&P 500 and Dow up about 1% and 1.5% respectively. Long-term US government bonds were down about 1.2% in March.
The Fidelity New Markets Income fund jumped another 2.12% locking in emerging market bonds as a top asset class over recent years. The last 10 years have been spectacular for emerging market debt and terrible for emerging market equity, we may shift around more to the out of favor equity.
Artisan International Small Cap has been our strongest equity fund in this model portfolio – our weakest model portfolio over the last 12 months. Last month the fund was down -.31%, as foreign markets slipped.
Junk bonds have been on a solid run for a few months now, and are currently one of the top asset classes. We do not plan on increasing weights here. Our junk bond choice for this fund, the Northeast Investor fund has not performed well in recent months compared to more aggressive funds. We still like the fund but wonder if we should move it into more conservative portfolio we run and put something a little more aggressive here. This is still one of the best long-term junk bond funds in the business, low fee and well managed.
Japan falls again, taking the T. Rowe Price Japan fund down 1.89%. This fund recently lost a manager but we don’t know of any better funds for this portfolio right now. We’re considering the Fidelity Small Company Japan fund mostly to increase risk and return here, but we may just make the move in our daredevil portfolio. Possibly the Vanguard Pacific Stock Index fund would be a replacement for this portfolio if we don’t like what happens at the T. Rowe fund in the future.
The Bridgeway Ultra Small Tax Adv fund has been our best stock fund performer over the last year for this model portfolio, and was up another 1.82% in March.
Telecom has stalled after coming back a bit in recent months, and the Gabelli Global Telecom fund was down .52% in March.
Emerging market stocks were weak, in contrast to emerging market bonds, which were strong. The newly added SSgA Emerging Markets fund was off –2.47% for the month.