The market shook off the troubles of March and headed to higher ground, up just shy of 3% in April. Considering the economy is showing some signs of running out of gas (perhaps because gas prices keep going up) and home prices are heading back down, investor optimism is surprisingly high. Too bad. Investors tend to do better long run getting in during periods of pessimism. Bonds were good after a period of rising interest rates early this year that was pushing mortgages into dangerous territory given the continued weakness in housing.
Benchmark Vanguard index funds for April: 500 Index (VFINX) up 2.95%, Total Bond Market (VBMFX) up 1.33%, International Index (VTMGX) up 6.37%. While our broad stock allocation is too low to lead to stock market returns in a strong market, many of our funds did well compared to the benchmarks leading to some good overall portfolio returns. Our Conservative portfolio was up 2.56% while our Aggressive portfolio was up 2.81% in April.
Foreign stocks beat US stocks in April, but healthcare and real estate were top categories with roughly 7% and 6% returns respectively (even better than the over 6% returns in most foreign markets). Energy funds were near the bottom with just a 1% return – strange given the strong move up in oil prices this year. Financials and natural resource funds were also near the bottom of the fund categories in April. The muni bond market continued to recover from the scares earlier this year.
In portfolio fund action last month the winners included:
Vanguard European ETF (VGK) rose 8.32% in April, better than the S&P 500 by 5.4%.
Health Care Select SPDR (XLV) rose 6.43% for the month on strong healthcare stocks.
UMB Scout Worldwide (UMBWX) rose 6.02% in April, better than the S&P 500 by 3.1% but not far off from international stock indexes.
As oil and other commodities continued higher, our high risk short fund PowerShares DB Commodity Double Short (DEE) sank -10.60% in April, worse than the S&P 500 by -13.6%
Our alternative fund PowerShares DB US Dollar Index (UUP) fell -3.86% in April, as the US dollar continued to sink.
Our alternative fund Satuit Capital Micro Cap (SATMX) increased 0.68% for the month, worse than the S&P 500 by -2.3% as microcap stocks stopped ourperforming. Smaller cap stocks in general underperformed the S&P 500 by a small margin, though our small cap growth Janus Triton fund (JATTX) did well with a 3.8% return.
Royce Financial Services Fund (RYFSX) climbed 1.60%, worse than the S&P 500 by -1.3% on weakness in financials which may be related to renewed trouble in housing.
April 2011 Performance Review
The market shook off the troubles of March and headed to higher ground, up just shy of 3% in April. Considering the economy is showing some signs of running out of gas (perhaps because gas prices keep going up) and home prices are heading back down, investor optimism is surprisingly high. Too bad. Investors tend to do better long run getting in during periods of pessimism. Bonds were good after a period of rising interest rates early this year that was pushing mortgages into dangerous territory given the continued weakness in housing.
Benchmark Vanguard index funds for April: 500 Index (VFINX) up 2.95%, Total Bond Market (VBMFX) up 1.33%, International Index (VTMGX) up 6.37%. While our broad stock allocation is too low to lead to stock market returns in a strong market, many of our funds did well compared to the benchmarks leading to some good overall portfolio returns. Our Conservative portfolio was up 2.56% while our Aggressive portfolio was up 2.81% in April.
Foreign stocks beat US stocks in April, but healthcare and real estate were top categories with roughly 7% and 6% returns respectively (even better than the over 6% returns in most foreign markets). Energy funds were near the bottom with just a 1% return – strange given the strong move up in oil prices this year. Financials and natural resource funds were also near the bottom of the fund categories in April. The muni bond market continued to recover from the scares earlier this year.
In portfolio fund action last month the winners included: