The SSgA Tuckerman Active REIT (SSREX) fund is no longer in this portfolio – we cashed out of funds that invest in REITs (real estate investment trusts) last summer. While we missed some upside in the fund, we also missed last months 15% fall. Given that stocks are more expensive then last year, if REITs fall another 15% or so we may add a small stake again.
The Conservative portfolio fell 2% in April which given the fall in bonds is not too bad for a bond-oriented portfolio. When bonds take a big hit, even short term bonds slip. Our stake in Vanguard Short Term Corporate (VFSTX) fell around 1.1%. Keep in mind longer term bonds fell over 5%. While short term bonds are better in a rising rate environment there are scenarios where long term bonds are better. If the yield curve flattens out with short term rates climbing while long term rates stay the same (or fall) short term bond investors will under-perform long term bond investors.
The biggest hit in the portfolio was the American Century International Bond fund, down a sharp 4%. We recently cut this fund back to 10% from 20% and would consider going back up to 20% if the fund falls more. Last year the fund was 25% of the portfolio. Even with the pullback, the fund is still up 38% since added in April 2002.
Recently added Bridgeway Balanced (BRBPX) fell 1.78% as the bond side of the fund took a hit, along with a slight decline in portfolio stock holdings, offset but some stock option income.
Utility stocks often tank when rates rise as the stocks are largely owned for the dividend, a dividend that is less attractive when government bonds pay more. American Century Utility Income (BULIX) fell 3.75%.
The growth portfolio fell 2.2% in April. The weakest links were Artisan International Small Cap (ARTJX), down 3.35% and SSgA Emerging Markets (SSEMX), down almost 9%.
Small cap and emerging market foreign stocks have both been so hot for over a year that it would be almost unfair to the other funds if they didn’t have a rough month or two. We recently cut this fund is down to 10% from our original stake of 20%.
Our stake in Vanguard Short Term Corporate (VFSTX) fell around 1.1%. Keep in mind that longer term bonds fell over 5%. While short term bonds are better in a rising rate environment, there are scenarios where long term bonds are better. If the yield curve flattens out with short term rates climbing while long term rates stay the same (or fall) short-term bond investors will under-perform long term bond investors. In general we think bonds were due for a pullback, which explains our shorter term bond focus. This may shift if rates continue to climb.
The largest stocks in the market actually held up well. The recently added Bridgeway Blue-Chip 35 index was down just .29% in April. Another Bridgeway fund we recently slimmed down our stake in didn’t have such a nice month; Bridgeway Ultra Small Company Market (BRSIX) fell 4.6% in April. We trimmed down to 5% last summer - a little early, but our old 20% stake is too much given the valuations and condition of the market.
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The SSgA Tuckerman Active REIT (SSREX) fund is no longer in this portfolio – we cashed out of funds that invest in REITs (real estate investment trusts) last summer. While we missed some upside in the fund, we also missed last months 15% fall. Given that stocks are more expensive then last year, if REITs fall another 15% or so we may add a small stake again.
The Conservative portfolio fell 2% in April which given the fall in bonds is not too bad for a bond-oriented portfolio. When bonds take a big hit, even short term bonds slip. Our stake in Vanguard Short Term Corporate (VFSTX) fell around 1.1%. Keep in mind longer term bonds fell over 5%. While short term bonds are better in a rising rate environment there are scenarios where long term bonds are better. If the yield curve flattens out with short term rates climbing while long term rates stay the same (or fall) short term bond investors will under-perform long term bond investors.
The biggest hit in the portfolio was the American Century International Bond fund, down a sharp 4%. We recently cut this fund back to 10% from 20% and would consider going back up to 20% if the fund falls more. Last year the fund was 25% of the portfolio. Even with the pullback, the fund is still up 38% since added in April 2002.
Recently added Bridgeway Balanced (BRBPX) fell 1.78% as the bond side of the fund took a hit, along with a slight decline in portfolio stock holdings, offset but some stock option income.
Utility stocks often tank when rates rise as the stocks are largely owned for the dividend, a dividend that is less attractive when government bonds pay more. American Century Utility Income (BULIX) fell 3.75%.
The growth portfolio fell 2.2% in April. The weakest links were Artisan International Small Cap (ARTJX), down 3.35% and SSgA Emerging Markets (SSEMX), down almost 9%.
Small cap and emerging market foreign stocks have both been so hot for over a year that it would be almost unfair to the other funds if they didn’t have a rough month or two. We recently cut this fund is down to 10% from our original stake of 20%.
Our stake in Vanguard Short Term Corporate (VFSTX) fell around 1.1%. Keep in mind that longer term bonds fell over 5%. While short term bonds are better in a rising rate environment, there are scenarios where long term bonds are better. If the yield curve flattens out with short term rates climbing while long term rates stay the same (or fall) short-term bond investors will under-perform long term bond investors. In general we think bonds were due for a pullback, which explains our shorter term bond focus. This may shift if rates continue to climb.
The largest stocks in the market actually held up well. The recently added Bridgeway Blue-Chip 35 index was down just .29% in April. Another Bridgeway fund we recently slimmed down our stake in didn’t have such a nice month; Bridgeway Ultra Small Company Market (BRSIX) fell 4.6% in April. We trimmed down to 5% last summer - a little early, but our old 20% stake is too much given the valuations and condition of the market.