The Conservative portfolio climbed just over 1.5% in October, aided by a 4.35% increase in American Century Utility Income (BULIX).
Utilities are proving to be one of the strongest areas in the market this year. We’ve owned a utilities fund in most of our model portfolios these past few years so we are pleased to see this formerly out of favor area take off.
What really kicked off the current Utilities rally, in our opinion, was not just falling interest rates which make utility dividends more attractive. The main cause was Vanguard’s decision to kill their Utility fund, which they did by re-branding it a more diversified dividend growth fund in late 2002. What happened after the change? In 2003 the Dow Jones Utility Index gained 29%, 20% this year alone- trouncing the S&P500. When fund families want out of certain types because of a lack of investor interest, it’s often a good time to invest in that area.
Another plus for the portfolio was the 3.72% jump in the American Century International Bond fund (BEGBX). Bonds were strong last month, but the real pop was from a falling U.S. dollar.
Speculative debt continued to climb; Vanguard High Yield Corporate was up 1.71%, our second best fund in the portfolio. No fund in the portfolio was in the red last month.
Value oriented large cap stocks performed poorly, and the Vanguard Dividend Growth fund was up just .79%. The Dow was actually down .36% last month – essentially the only index that didn’t post a gain. The main culprit was Merck (MRK), but general weakness in mega cap stocks explains the poor showing.
The Dow is down 2.47% for the year at the end of October, compared to the S&P500’s 3% gain. The upside in the S&P500 was mostly from the smaller companies in the index. The S&P100 index, which tracks the largest stocks in the S&P500, is actually down for the year.
Giant cap stocks have performed poorly compared to the broad market for the last five years – correcting years of mismatched outperformace by large caps in the last ‘90s. It’s time to consider these mega cap stocks again.
The Aggressive Growth portfolio climbed 1.88% in October.
We just sold our remaining stake in Bridgeway Ultra Small Company Market (BRSIX) after a near 80% return since we added it to the portfolio in early 2002 – thanks for the ride Bridegway! The fund was up 2.13% for October, ending our run on a strong note.
There is just too much money going into microcap stocks for us to be comfortable with these funds right now. We’ve moved the money into a fund with the opposite strategy the Bridgeway Blue Chip 35 (BRLIX), which owns the very largest stocks in the market. This is one of the lowest fee funds in the business, and can’t attract a dime in assets because mega cap stocks are out of favor with investors.
Value oriented large cap stocks performed poorly, and the Vanguard Dividend Growth fund was up just .79%. The Dow was actually down .36% last month – essentially the only index that didn’t post a gain. The main culprit was Merck (MRK), but general weakness in mega cap stocks explains the poor showing.
The Dow is down 2.47% for the year at the end of October, compared to the S&P500’s 3% gain. The upside in the S&P500 was mostly from the smaller companies in the index. The S&P100 index, which tracks the largest stocks in the S&P500, is actually down for the year.
Smaller cap and emerging market stocks performed well again last month, with Artisan International up 4.27% on the heals of September’s 3.4% rise. This fund is now up 70% since we added it back in early 2002. SSgA Emerging Market gained 2.61% and is now up 13.77% over the last three months.
Telecom continues to have a good run this year, with the Gabelli Global Telecom posting a 3.48% gain in October.
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The Conservative portfolio climbed just over 1.5% in October, aided by a 4.35% increase in American Century Utility Income (BULIX).
Utilities are proving to be one of the strongest areas in the market this year. We’ve owned a utilities fund in most of our model portfolios these past few years so we are pleased to see this formerly out of favor area take off.
What really kicked off the current Utilities rally, in our opinion, was not just falling interest rates which make utility dividends more attractive. The main cause was Vanguard’s decision to kill their Utility fund, which they did by re-branding it a more diversified dividend growth fund in late 2002. What happened after the change? In 2003 the Dow Jones Utility Index gained 29%, 20% this year alone- trouncing the S&P500. When fund families want out of certain types because of a lack of investor interest, it’s often a good time to invest in that area.
Another plus for the portfolio was the 3.72% jump in the American Century International Bond fund (BEGBX). Bonds were strong last month, but the real pop was from a falling U.S. dollar.
Speculative debt continued to climb; Vanguard High Yield Corporate was up 1.71%, our second best fund in the portfolio. No fund in the portfolio was in the red last month.
Value oriented large cap stocks performed poorly, and the Vanguard Dividend Growth fund was up just .79%. The Dow was actually down .36% last month – essentially the only index that didn’t post a gain. The main culprit was Merck (MRK), but general weakness in mega cap stocks explains the poor showing.
The Dow is down 2.47% for the year at the end of October, compared to the S&P500’s 3% gain. The upside in the S&P500 was mostly from the smaller companies in the index. The S&P100 index, which tracks the largest stocks in the S&P500, is actually down for the year.
Giant cap stocks have performed poorly compared to the broad market for the last five years – correcting years of mismatched outperformace by large caps in the last ‘90s. It’s time to consider these mega cap stocks again.
The Aggressive Growth portfolio climbed 1.88% in October.
We just sold our remaining stake in Bridgeway Ultra Small Company Market (BRSIX) after a near 80% return since we added it to the portfolio in early 2002 – thanks for the ride Bridegway! The fund was up 2.13% for October, ending our run on a strong note.
There is just too much money going into microcap stocks for us to be comfortable with these funds right now. We’ve moved the money into a fund with the opposite strategy the Bridgeway Blue Chip 35 (BRLIX), which owns the very largest stocks in the market. This is one of the lowest fee funds in the business, and can’t attract a dime in assets because mega cap stocks are out of favor with investors.
Value oriented large cap stocks performed poorly, and the Vanguard Dividend Growth fund was up just .79%. The Dow was actually down .36% last month – essentially the only index that didn’t post a gain. The main culprit was Merck (MRK), but general weakness in mega cap stocks explains the poor showing.
The Dow is down 2.47% for the year at the end of October, compared to the S&P500’s 3% gain. The upside in the S&P500 was mostly from the smaller companies in the index. The S&P100 index, which tracks the largest stocks in the S&P500, is actually down for the year.
Smaller cap and emerging market stocks performed well again last month, with Artisan International up 4.27% on the heals of September’s 3.4% rise. This fund is now up 70% since we added it back in early 2002. SSgA Emerging Market gained 2.61% and is now up 13.77% over the last three months.
Telecom continues to have a good run this year, with the Gabelli Global Telecom posting a 3.48% gain in October.