At least the market ended the year on a positive note. The S&P 500 was up a measly 1.06% in December, but this not-so-sharp turnaround means the S&P 500 fell a ‘mere’ 37% in 2008. The Dow fared better for the year, with a 31.93% drop, but managed to retreat 0.39% in December. The Nasdaq was down just over 40% for the year and up 2.7% for the month, while the Russell 2000 small cap index did manage to get hot with a 5.80% return for the month, keeping the total loss for the year down to 33.79%. Foreign indexes were down over 40% in ’08.All of our model portfolios beat the S&P 500 in December and for the year. ...read the rest of this article»

Compared to October, November was a gangbuster month for stocks. The S&P fell only 7.18%, the Nasdaq and Russell 2000 dropped by double-digits, and the Dow posted a 4.86% loss. Government bonds were the only true winner. The Lehman Brothers US Government Long Bond Index gained a blistering 11.78% as interest rates on government bonds plunged to record lows caused by investors panic buying the safest investment around. Too bad Lehman didn’t own more government bonds - they might still be in business. What did Lehman load up on near the end? Commercial real estate – REITs were about the worst performing area last month with a roughly 25% drop. ...read the rest of this article»

October was a month where there was, to quote Martha and the Vandellas, ‘nowhere to run to, nowhere to hide’. The S&P 500 dropped a whopping 16.8% – and would have been down far more were it not for the sharp 1,000+ point surge in the Dow during the last few days of the month. The S&P 500 is now lower than it was when we launched our model portfolios in April 2002. With this backdrop, we’re satisfied with our 27% to 71% since inception return range across our model portfolios. ...read the rest of this article»

The S&P 500 dropped  8.91% in September, which was the second-worst single month for the index since we launched our model portfolios in April of 2002. (The worst month ever was September of that same year). While the Nasdaq was down just over 12%, investors in U.S. markets had a (gulp) relatively easy time of it. Foreign markets fell about 15% in September with emerging markets down around 20%. ...read the rest of this article»

August was a good month for U.S. stocks and bonds, a crummy month for …well just about everything else around the world. So far, September is not turning out as peachy. ...read the rest of this article»

You have to be impressed by the government’s recurring ability to stop the market from completely falling apart. In July, we most certainly would have seen the demise of Fannie and Freddie had it not been for the swift reassurance to the market that the “S” in GSE (Government Sponsored Entities) not only stands for “Sponsored” but in fact stands for Supported, maybe even Saved. ...read the rest of this article»

The strength we saw in most stock indexes in May turned to weakness in June. Before all was said and done the Dow was down around 10% for the month, with other broad indexes following suit. The Nasdaq dropped 9.11% in June, the Russell 2000 small cap index 7.7%, and the S&P 500 8.43%. With July’s continued carnage we’re now in bear market territory – a 20% drop from a market peak – in all of the big indexes. None of our model portfolios was down more than 5% in June. ...read the rest of this article»

In May the hope that the worst was behind us in the mortgage crisis and in financials evaporated. Financial SPDR (XLF) – the financial sector ETF – was down 6.08% in May, while the KBW Bank ETF was down almost 8%. Oddly, REITs (real estate investment trusts) bucked the trend with a slight increase in the category as a whole, as investors continue to think this part of the real estate market won’t sink much more than it already has. ...read the rest of this article»

The growing belief with investors is not only that the worst of the credit crisis is behind us, but that it is in fact almost over. If home prices do not decline any more (fat chance) this belief would be true. ...read the rest of this article»

By mid-March the market was not looking good, sliding to new lows as financial services stocks continued to suffer - but once again things turned around and ended basically flat for the month. The S&P 500 was down 0.43% in March – the 5th straight monthly decline. Other indexes did better; the Dow was up 0.12%, the Nasdaq 0.34%, and the Russell 2000 small cap index 0.42%. Higher quality bonds were up slightly as well, while riskier corporate debt and most of the mortgage bond market slipped. ...read the rest of this article»