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June 2014 Performance Review

July 1, 2014

The Dow is pushing 17,000 and the S&P 500 just wrapped up a streak of six quarterly gains. The last time the market had a run like this was the late 1990s. Speaking of, the NASDAQ is now just 12% lower than the all-time high hit in early 2000. This means, with dividends, those that made an ill-timed tech stock bet with the NASDAQ just over 14 years ago recently broke even.

The market seems to be moving up on a combination of low interest rates, an economy that isn't quite as weak as feared, and a hot market for smaller growth stocks.

Our Conservative portfolio was gained 0.72% in June, while our Aggressive portfolio was up 0.41%. Benchmark Vanguard funds for June 2014: 500 Index Vanguard 500 Index Fund (VFINX) +2.05%; Vanguard Total Bond Market Index Fund (VBMFX) +0.11%; Vanguard Developed Markets Index Fund (VTMGX) +1.06%; Vanguard Emerging Markets Stock Index (VEIEX) +3.00%; Vanguard Star Fund (VGSTX) a total global balanced portfolio +1.47%.

Bonds were largely flat, but emerging markets continued to rebound strongly. Our iShares MSCI BRIC Index (BKF) gained 2.74% in June. We were held back largely by longer term bonds, European stocks, and our small short positions on two of the few strong commodities — oil and gold (or rather one commodity and one collectible).

In general the worse performing categories of the mild pullback earlier this year were strongest last month, with smaller cap funds up 3 to 6 percent for the month. Our Satuit Capital Micro Cap (SATMX) was our second best fund gaining 3.58%, following PRIMECAP Odyssey Growth (POGRX) which rose 3.83%.

European stocks was the main weak area abroad. The European economy seems sluggish as the European Central Bank recently tried negative interest rates to fight possible deflation. Underperformers for us included Vanguard European ETF (VGK) and Vanguard Europe Pacific ETF (VEA) flat to slightly down; while Wasatch Frontier Emerg Sm Count (WAFMX) bucked the upward trend in emerging markets, falling a little less than 1%. The real losers were PowerShares DB Crude Oil Dble Short (DTO) and Gold Short (DZZ) down just over 6% and 12% respectively as oil markets and perhaps gold continued to move up on Middle East trouble.

Stock Funds1mo %
PRIMECAP Odyssey Growth (POGRX)3.83%
Satuit Capital Micro Cap (SATMX)3.58%
[Benchmark] Vanguard Emerging Mkts Stock Idx (VEIEX)3.00%
iShares MSCI BRIC Index (BKF)2.74%
American Century Utility Income (BULIX)2.59%
Vanguard MegaCap Growth (MGK)2.16%
Artisan Global Equity (ARTHX)2.14%
Wasatch Long/Short (FMLSX)2.11%
[Benchmark] Vanguard 500 Index (VFINX)2.05%
[Benchmark] Vanguard Tax-Managed Intl Adm (VTMGX)1.06%
Vanguard Telecom Services ETF (VOX)0.31%
Vanguard European ETF (VGK)-0.09%
Vanguard Europe Pacific ETF (VEA)-0.16%
Wasatch Frontier Emerg Sm Count (WAFMX)-0.60%
PowerShares DB Crude Oil Dble Short (DTO)-6.43%
Gold Short (DZZ)-12.64%
Bond Funds1mo %
DoubleLine Floating Rate N (DLFRX)0.36%
Vanguard Long-Term Bond Index ETF (BLV)0.23%
PIMCO Mortgage Opportunities D (PMZDX)0.13%
[Benchmark] Vanguard Total Bond Index (VBMFX)0.11%
Vanguard Extended Duration Treasury (EDV)-0.28%