Powerfund Portfolios Performance Review

Powerfund Portfolios Commentary

Commentary

February 17, 2009

The Conservative Portfolio climbed 1.27% in January.

2009 is starting off even worse than 2008. In January, the S&P 500 fell by 8.41%, with a similar drop in the Dow of 8.65%. Small cap stocks fared even worse with an 11.12% slide in the Russell 2000 Index, which measures smaller cap stocks. Even the mighty long-term government bond slid a sharp 8.5%, ending last year’s meteoric run. Tech stocks were relatively strong with a 6.3% drop in the Nasdaq and a mild 2.29% drop in the larger cap-oriented Nasdaq 100.

Foreign stocks fared slightly worse than U.S, indexes though some emerging markets were relatively strong after a big beating in 2008. The real trouble was (once again) in financials, notably banks, where the typical bank stock was down some 30% for the month. REITs, or real estate investment trusts, where down almost 20% in January as well, as the real estate bubble just keeps on deflating, wiping out all leveraged players in its wake.

Government spending and support of the collapsing economy has gone into overdrive and can now only be measured in the trillions. Apparently we will find out once and for all if a depression can be prevented by massive government spending. Many major banks’ futures are uncertain at best. Without bailout money, most of the top ten banks would surely have already failed. Why all these bankers didn’t see the trouble brewing in real estate remains a mystery. Surely some deserve to lose their banks, and their jobs. One problem is that for every $1 in government spending the fear factor of an economy in peril is causing perhaps another $1 to not get spent as consumers panic about the future. Investors are just as scared; favoring cash over stocks at levels we’ve never seen. We’d like to see one more large drop and will consider shifting more to stocks on it.

On the positive note, our average portfolio was down 2.39% or less than half the S&P 500’s drop in January 2009…

Nakoma Absolute Return (NARFX) delivered a positive return of 1.5% in a bad month for stocks, a nice showing and more of what we want to see. While we were glad this fund didn’t tank like 95% of the other funds out there, we still weren’t that impressed with the -4.34% return in 2008 – though this return beats almost all stock funds and some bond funds in 2008.

Janus Global Research (JARFX) had another good month relative to the market with a 6.27% drop, helping make up for a bad return during the market’s worst months last year.

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December 2009 performance review

January 20, 2009
Category: 
Powerfund Portfolios

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»

November 2008 performance review

December 17, 2008
Category: 
Powerfund Portfolios

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 2008 performance review

November 18, 2008
Category: 
Powerfund Portfolios

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»

September 2008 performance review

October 16, 2008
Category: 
Powerfund Portfolios

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 2008 performance review

September 17, 2008
Category: 
Powerfund Portfolios

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»

July 2008 Performance Review

August 17, 2008
Category: 
Powerfund Portfolios

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»

June 2008 Performance review

July 16, 2008
Category: 
Powerfund Portfolios

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»

may 2008 performance review

June 17, 2008
Category: 
Powerfund Portfolios

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»

April 2008 performance review

May 17, 2008
Category: 
Powerfund Portfolios

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»

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