The Conservative portfolio climbed 0.83% in August. Bonds and stocks reversed course from July – bonds went up and stocks went down.
Junk bonds were the weakest part of the bond market, possibly because investors are starting to fear the solvency of corporate America once again, in light of the financial troubles hitting the airline industry. Some more leveraged companies – beyond just airlines – could have trouble eating the higher costs of energy for long periods of time. Vanguard High Yield Corporate was up just 0.25% in August, but it’s worth noting that in July junk bonds outperformed the investment grade bond market.
Foreign bonds turned around as falling interest rates played a role in the U.S. dollar slipping once again – and why would foreigners want to buy U.S. bonds at such a piddling yield? Lack of demand for U.S. bonds means less buying of U.S. dollars to purchase the bonds, which means a weaker dollar. American Century International Bond was up 2.71% in August. So much for the additional weakness we were looking for to increase our stake once again.
Utility stocks keep hitting new highs. This month interest rates were down which at least rationalizes the move up in Utility shares to some extent. American Century Utility Income was up 1.1% for the month and is now up 88% since we added it to the portfolio – a near perfect demonstrations of our contrarian philosophy in action.
Other than utilities, foreign stocks were one of the few places with positive returns last month. SSgA International Growth Opportunities scored a solid near 3% gain on top of last month’s 3.47% jump.
The Aggressive Growth portfolio climbed 0.28% in August. Bonds and stocks reversed course from July – bonds went up and stocks went down.
Other than utilities, foreign stocks were one of the few places with positive returns last month. Artisan International Small Cap rose near 4% in August. This fund is up over 12% in the last three months and 121% since we added it to the portfolio (gulp). This whole small cap and foreign thing should be running out of gas - it has more than undone the large cap and U.S. focus of the last 90s. See how when everybody is buying large cap U.S. (late 90s) the exact opposite – foreign and small cap – has a great run. We only wish there was such a clear path of investor over exposure so we could do the opposite today. Emerging markets were strong but not as strong as “emerged” countries stocks. SSgA Emerging Markets was up about 1.4%.
Japan was the hottest market of all in August; T. Rowe Price Japan (PRJPX) was up just over 8% last month. The stock market in Japan hit multi-year highs even though high energy prices could drag on a country that imports virtually all of its energy (unlike the U.S.). Japan will probably not hit all time highs anytime soon. It still hast about 200% more to go to hit those levels from over 15 years ago. See what happens when you buy in a bubble? It takes a generation to win back your losses…
Bridgeway Blue Chip 35 moves in close step with most major indexes as the ultra large stocks in this fund are the biggest components of the indices. The fund was down 1.27% in August. Our overweighting here is why this portfolio didn’t score a bigger return.
Large cap tech didn’t fall quite as far as the market and is hanging on to recent gains. Technology SPDR was down .71% in August. Big cap chip makers like Texas Instruments have been performing very well lately.
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The Conservative portfolio climbed 0.83% in August. Bonds and stocks reversed course from July – bonds went up and stocks went down.
Junk bonds were the weakest part of the bond market, possibly because investors are starting to fear the solvency of corporate America once again, in light of the financial troubles hitting the airline industry. Some more leveraged companies – beyond just airlines – could have trouble eating the higher costs of energy for long periods of time. Vanguard High Yield Corporate was up just 0.25% in August, but it’s worth noting that in July junk bonds outperformed the investment grade bond market.
Foreign bonds turned around as falling interest rates played a role in the U.S. dollar slipping once again – and why would foreigners want to buy U.S. bonds at such a piddling yield? Lack of demand for U.S. bonds means less buying of U.S. dollars to purchase the bonds, which means a weaker dollar. American Century International Bond was up 2.71% in August. So much for the additional weakness we were looking for to increase our stake once again.
Utility stocks keep hitting new highs. This month interest rates were down which at least rationalizes the move up in Utility shares to some extent. American Century Utility Income was up 1.1% for the month and is now up 88% since we added it to the portfolio – a near perfect demonstrations of our contrarian philosophy in action.
Other than utilities, foreign stocks were one of the few places with positive returns last month. SSgA International Growth Opportunities scored a solid near 3% gain on top of last month’s 3.47% jump.
The Aggressive Growth portfolio climbed 0.28% in August. Bonds and stocks reversed course from July – bonds went up and stocks went down.
Other than utilities, foreign stocks were one of the few places with positive returns last month. Artisan International Small Cap rose near 4% in August. This fund is up over 12% in the last three months and 121% since we added it to the portfolio (gulp). This whole small cap and foreign thing should be running out of gas - it has more than undone the large cap and U.S. focus of the last 90s. See how when everybody is buying large cap U.S. (late 90s) the exact opposite – foreign and small cap – has a great run. We only wish there was such a clear path of investor over exposure so we could do the opposite today. Emerging markets were strong but not as strong as “emerged” countries stocks. SSgA Emerging Markets was up about 1.4%.
Japan was the hottest market of all in August; T. Rowe Price Japan (PRJPX) was up just over 8% last month. The stock market in Japan hit multi-year highs even though high energy prices could drag on a country that imports virtually all of its energy (unlike the U.S.). Japan will probably not hit all time highs anytime soon. It still hast about 200% more to go to hit those levels from over 15 years ago. See what happens when you buy in a bubble? It takes a generation to win back your losses…
Bridgeway Blue Chip 35 moves in close step with most major indexes as the ultra large stocks in this fund are the biggest components of the indices. The fund was down 1.27% in August. Our overweighting here is why this portfolio didn’t score a bigger return.
Large cap tech didn’t fall quite as far as the market and is hanging on to recent gains. Technology SPDR was down .71% in August. Big cap chip makers like Texas Instruments have been performing very well lately.