In July, safer investments performed better than more speculative ones. The Dow was up 0.45%, the S&P500 gained 0.62%, and the S&P100 – the largest stocks from the S&P500 - rose a solid 1.7%. The Russell 2000 small cap index was down 3.25%, while the Nasdaq fell 3.71%. Larger cap foreign stocks more or less stabilized and moved up with the U.S. market, but smaller cap foreign stocks had some trouble. Bonds gained as interest rates headed downward – so much for the big interest rate increase. The Vanguard Total Bond Index was up 1.35% for the month.
All of our portfolios beat the major stock market indexes last month – Dow, S&P500, Nasdaq, and Russell 2000.
The exception to the safer-did-better rule was emerging markets, which were up just over 1% in July. As emerging markets were coming off double digit declines in the weeks previous to this small gain, the category's rebound is not really that impressive.
Inflation fears waned. The Fed stopped raising rates, the housing market appears to be cooling, not crashing, the economy is slowing, not stalling, and the rockets stopped flying in the latest mid-east conflict (causing oil prices to dip).
Temporarily panicked fund investors seem to have settled down as certain falling markets have stopped falling – emerging markets, precious metals, commodities. Darn, we were hopping for some better buying opportunities ahead.
Our Conservative portfolio jumped 1.14% in July on strength in most types of income oriented investments – as is often the case when inflation fears subside and interest rates fall.
Telecom stocks were among the market's best performers in July. Vanguard Telecom ETF (formerly knows as Vanguard Telecom VIPER) rose 1.9%. This on top of June’s 3.16% return.
The real strength last month was in healthcare. Our ETF Healthcare Select SPDR was up a solid 5.41% in July - a big gain for this type of fund. This is the fund's largest montly gain since we added it to the portfolio, and counters the previous four mildly crummy months. Investors like the reliable income streams of healthcare stocks in a recession, and liability concerns are easing.
Our next best gainer was Harbor Bond, up a solid 1.59% in July, a bit more than a generic bond index. It’s really starting to look like Bill Gross is right – we have one more big bond rally where interest rates slip. He has positioned his fund to gain with falling rates, a strategy that wasn't paying off when rates were climbing. Looking forward, he also thinks that the future is bleak for the economy in general and bonds in particular.
Junk bonds underperformed the rest of the bond market by a slim margin – Vanguard High Yield Corporate climbed 0.78% in July – so the yield spread of risky bonds over safe bonds inched up again. We’re still at relatively low yield spreads, especially considering we may be heading into a default-causing recession, so big increases in our junk bond exposure is not likely without more changes in the economy, yield curve, and risk spread.
Even shorter term bond funds are adding some measurable return now that short term rates are fairly high and do not appear to be going any higher. Vanguard Short Term Investment Grade was up 0.76%.
The only slouch in the Conservative Portfolio last month was Bridgeway Balanced, down 0.71%. It wasn’t the bond side that faltered, so the funds stock picks and or option writing was a loser for the month.
International stocks have stopped falling, but are hardly going great guns. SSgA International Growth was up a slim .33%.
In July, safer investments performed better than more speculative ones. The Dow was up 0.45%, the S&P500 gained 0.62%, and the S&P100 – the largest stocks from the S&P500 - rose a solid 1.7%. The Russell 2000 small cap index was down 3.25%, while the Nasdaq fell 3.71%. Larger cap foreign stocks more or less stabilized and moved up with the U.S. market, but smaller cap foreign stocks had some trouble. Bonds gained as interest rates headed downward – so much for the big interest rate increase. The Vanguard Total Bond Index was up 1.35% for the month.
All of our portfolios beat the major stock market indexes last month – Dow, S&P500, Nasdaq, and Russell 2000.
The exception to the safer-did-better rule was emerging markets, which were up just over 1% in July. As emerging markets were coming off double digit declines in the weeks previous to this small gain, the category's rebound is not really that impressive.
Inflation fears waned. The Fed stopped raising rates, the housing market appears to be cooling, not crashing, the economy is slowing, not stalling, and the rockets stopped flying in the latest mid-east conflict (causing oil prices to dip).
Temporarily panicked fund investors seem to have settled down as certain falling markets have stopped falling – emerging markets, precious metals, commodities. Darn, we were hopping for some better buying opportunities ahead.
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In July, safer investments performed better than more speculative ones. The Dow was up 0.45%, the S&P500 gained 0.62%, and the S&P100 – the largest stocks from the S&P500 - rose a solid 1.7%. The Russell 2000 small cap index was down 3.25%, while the Nasdaq fell 3.71%. Larger cap foreign stocks more or less stabilized and moved up with the U.S. market, but smaller cap foreign stocks had some trouble. Bonds gained as interest rates headed downward – so much for the big interest rate increase. The Vanguard Total Bond Index was up 1.35% for the month.
All of our portfolios beat the major stock market indexes last month – Dow, S&P500, Nasdaq, and Russell 2000.
The exception to the safer-did-better rule was emerging markets, which were up just over 1% in July. As emerging markets were coming off double digit declines in the weeks previous to this small gain, the category's rebound is not really that impressive.
Inflation fears waned. The Fed stopped raising rates, the housing market appears to be cooling, not crashing, the economy is slowing, not stalling, and the rockets stopped flying in the latest mid-east conflict (causing oil prices to dip).
Temporarily panicked fund investors seem to have settled down as certain falling markets have stopped falling – emerging markets, precious metals, commodities. Darn, we were hopping for some better buying opportunities ahead.
Our Conservative portfolio jumped 1.14% in July on strength in most types of income oriented investments – as is often the case when inflation fears subside and interest rates fall.
Telecom stocks were among the market's best performers in July. Vanguard Telecom ETF (formerly knows as Vanguard Telecom VIPER) rose 1.9%. This on top of June’s 3.16% return.
The real strength last month was in healthcare. Our ETF Healthcare Select SPDR was up a solid 5.41% in July - a big gain for this type of fund. This is the fund's largest montly gain since we added it to the portfolio, and counters the previous four mildly crummy months. Investors like the reliable income streams of healthcare stocks in a recession, and liability concerns are easing.
Our next best gainer was Harbor Bond, up a solid 1.59% in July, a bit more than a generic bond index. It’s really starting to look like Bill Gross is right – we have one more big bond rally where interest rates slip. He has positioned his fund to gain with falling rates, a strategy that wasn't paying off when rates were climbing. Looking forward, he also thinks that the future is bleak for the economy in general and bonds in particular.
Junk bonds underperformed the rest of the bond market by a slim margin – Vanguard High Yield Corporate climbed 0.78% in July – so the yield spread of risky bonds over safe bonds inched up again. We’re still at relatively low yield spreads, especially considering we may be heading into a default-causing recession, so big increases in our junk bond exposure is not likely without more changes in the economy, yield curve, and risk spread.
Even shorter term bond funds are adding some measurable return now that short term rates are fairly high and do not appear to be going any higher. Vanguard Short Term Investment Grade was up 0.76%.
The only slouch in the Conservative Portfolio last month was Bridgeway Balanced, down 0.71%. It wasn’t the bond side that faltered, so the funds stock picks and or option writing was a loser for the month.
International stocks have stopped falling, but are hardly going great guns. SSgA International Growth was up a slim .33%.
In July, safer investments performed better than more speculative ones. The Dow was up 0.45%, the S&P500 gained 0.62%, and the S&P100 – the largest stocks from the S&P500 - rose a solid 1.7%. The Russell 2000 small cap index was down 3.25%, while the Nasdaq fell 3.71%. Larger cap foreign stocks more or less stabilized and moved up with the U.S. market, but smaller cap foreign stocks had some trouble. Bonds gained as interest rates headed downward – so much for the big interest rate increase. The Vanguard Total Bond Index was up 1.35% for the month.
All of our portfolios beat the major stock market indexes last month – Dow, S&P500, Nasdaq, and Russell 2000.
The exception to the safer-did-better rule was emerging markets, which were up just over 1% in July. As emerging markets were coming off double digit declines in the weeks previous to this small gain, the category's rebound is not really that impressive.
Inflation fears waned. The Fed stopped raising rates, the housing market appears to be cooling, not crashing, the economy is slowing, not stalling, and the rockets stopped flying in the latest mid-east conflict (causing oil prices to dip).
Temporarily panicked fund investors seem to have settled down as certain falling markets have stopped falling – emerging markets, precious metals, commodities. Darn, we were hopping for some better buying opportunities ahead.