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February 2014 Performance Review

March 4, 2014

The seesaw is back. A market that was looking a little scary in January and early February rebounded strongly, leaving the stocks basically flat for the year (until, that is, the start of March when Russian mischief sent stocks plummeting anew).

Our Conservative portfolio gained 2.10% in February; our Aggressive portfolio was up 1.03%. Benchmark Vanguard funds for February 2014: 500 Index (VFINX) up 4.56%; Total Bond Market Index (VBMFX) up 0.48%; International Index (VTMGX) up 5.73%; Emerging Markets Stock Index (VEIEX) up 3.42%; Vanguard STAR (VGSTX), a total balanced portfolio, up 3.61%.

The Conservative Powerfund Portfolio is having a better 2014 than our Aggressive, which is being held back by weak foreign stock markets. Emerging markets, already stumbling from investor outflows and somewhat scary tales of inflation and currency slides and weakening economies, now have to deal with one of the biggest markets, Russia, embroiled in what emerging market fund prospectuses would call “political instability”. We currently own a small stake in Russia indirectly through iShares MSCI BRIC Index (BKF), an emerging market ETF we added in 2013. We’ll consider a larger stake in this or a similar fund if we get crisis pricing. In our Aggressive portfolio we were largely out of emerging markets in 2006 through 2013.

February was strong for bonds and stocks across the board – even hard beaten areas like precious metals funds gained almost 10%. The worst category performers were only posted gains of one to two percent, including Japan and some emerging markets. Vanguard Telecom Services ETF (VOX) was one of the few funds that do not short that was down in February.

Stock Funds1mo %
Vanguard European ETF (VGK)7.34%
Vanguard Europe Pacific ETF (VEA)5.95%
Artisan Global Equity (ARTHX)5.91%
[Benchmark] Vanguard Tax-Managed Intl Adm (VTMGX)5.73%
PRIMECAP Odyssey Growth (POGRX)5.72%
Vanguard MegaCap Growth (MGK)5.26%
[Benchmark] Vanguard 500 Index (VFINX)4.56%
[Benchmark] Vanguard Emerging Mkts Stock Idx (VEIEX)3.42%
American Century Utility Income (BULIX)2.90%
Satuit Capital Micro Cap (SATMX)2.89%
iShares MSCI BRIC Index (BKF)2.19%
Wasatch Long/Short (FMLSX)2.09%
Wasatch Frontier Emerg Sm Count (WAFMX)1.64%
Vanguard Telecom Services ETF (VOX)-0.64%
PowerShares DB Crude Oil Dble Short (DTO)-11.67%
Gold Short (DZZ)-12.81%
Bond Funds1mo %
Vanguard Long-Term Bond Index ETF (BLV)1.01%
PIMCO Mortgage Opportunities D (PMZDX)0.59%
[Benchmark] Vanguard Total Bond Index (VBMFX)0.48%
Vanguard Extended Duration Treasury (EDV)0.35%
DoubleLine Floating Rate N (DLFRX)0.03%