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December 2012 Performance Review

Investing in markets that seem poised to plummet can be more rewarding than investing when things seem safe. Sadly many investors bailed out of stock funds in recent years. Good news on the bad news front: most every serious financial problem facing America was just kicked down the road.

She Moves in Mysterious Ways: Our Year-End Super-Duper Fiscal Cliff Spectacular

The so-called fiscal cliff is just a couple of weeks away, and while the fiscal cliff is certainly real, the ultimate size of the drop-off is unknown. There are many complex financial happenings at the end of 2012. Some have to do with estate taxes, some with ordinary income, and some with investment income. We can’t speak to all of the strategies available to those with different financial issues; moreover, non-investment tax issues would require the advice of estate attorneys and accountants. That doesn't mean, however, that everyone needs to seek such professionals or make any changes.

November 2012 Performance Review

Slowly but surely the Powerfund Portfolios are inching up on the S&P 500’s double-digit 2012 return. Competing against the S&P is a challenge because the portfolios are almost always at a lower risk profile because of our allocation to bonds. Even when we are closer heavily allocated to stocks and light on bonds (usually after big slides in the market) we are more diversified than the S&P 500.

Vote Party Poopers

The party that should win is the Party Pooper Party, the one that gives voters a reality check – not nearly as fun as hocus-pocus economics. The Party Pooper Party never wins elections, though, because voters want to believe in magic. 

October 2012 Performance Review

The good times for stocks came to an end in October, though not too abruptly. The S&P 500 was down 1.86% for the month, but is still up an impressive 14.16% for the year. The recent storm hitting the financial epicenter of America and the world had no negative impact on stocks other than a historic closing of the exchange. Surprisingly, foreign stocks did well while emerging market stocks declined. Bonds were essentially flat for the month, as were both Powerfund Portfolios. 

New Stats Page!

In celebration of the 10th year of Powerfund Portfolios, we're introducing a new  “Stats” page for both the Conservative and the Aggressive Portfolios. Here’s a quick tour.

September 2012 Performance Review

2012 is turning out to be a good year for stocks and bonds. With September’s 2.58% increase in the S&P 500 equities are up just over 16% since Jan 1. The YTD total bond market fund is up 4% through the end of September. This in the face of on-again-off-again Euro death spiral news and a domestic economy that, while not stalling, is sputtering or at least misfiring outside of technology. 

How We Doin’? (10-Year Edition)

In early 2002, we launched the model portfolios as a way to apply our MAXfunds rating system to an actual portfolio. Our goal was to offer portfolios with varying levels of risk (at the time, we had five core portfolios and two special-purpose portfolios) for different types of investors, including those with only a few thousand dollars to invest.  Now that the Powerfund Portfolios are in their tenth year (we created them in March 2002), we think it's a good time to take a look back at our long-term performance. 

August 2012 Performance Review

In the absence of scary economic news, stocks drift higher – like the roughly 2.25% gain in August. We would expect this to continue if we avoid a deep recession and any debt market shocks that drive rates higher. 

When Bad Things Happen to Good Fund Shareholders

Baby Boomers are following the age-old advice to shift from stocks to bonds as they grow older, despite the fact that this general recommendation might not apply in a world in which bonds yield less than stocks. But two 50%+ haircuts in the stock market since 2000 (with a "flash crash" thrown in for good measure) certainly aren't inspiring confidence in the stock market. Fear of another global catastrophe is keeping some money in seemingly low-risk places, but that doesn’t explain the shift within stock funds.