What's New

At Some Point

08/03/09 - Powerfund Portfolios Feature Article

From the March low (hit just a few days after our last buy in our model portfolios), the market is up around 50% - among the greatest returns in a few months ever. Makes one wonder how much faster stocks could possibly go up in a short time period. What if the government did what everybody wanted it to do? Perhaps good and bad government policy is overrated as it pertains to stock prices.

June 2009 Performance Review

07/18/09 - Powerfund Portfolios Performance Review

The S&P500 was up just 0.22% in June, taking a breather from the recent sharp rise off the bottom. Tech stocks were much stronger with a 3.42% climb in the Nasdaq. Small cap stocks were up 1.47% while government bonds climbed 0.77% as the rise in interest rates in recent months subsided, probably just in time to prevent more damage to real estate markets.

Trade Talk

07/03/09 - Powerfund Portfolios Feature Article

We manage the MAXadvisor Powerfund Portfolios as contrarian investors. When fund investors are panicking and taking money out of stock funds, we try to increase our allocations. When they get their nerve back, often after a big rally, we tend to cut back. This doesn't make gut sense; stocks sure seem safer today than back in early March when the 'D' word (Depression) was being bandied about, but that's the irony of the stock market: It has more upside potential when it seems to have more downside risk and more downside risk when it seems to have more upside.

June 2009 Trade Alert!

06/30/09 - Powerfund Portfolios Trade Alert!

Our roughly 60% return in four months (double the overall market) in the Financials Select Sector SPDR ETF (XLF) marks a good exit point from financial services stocks. While financial stocks may have more upside, the bargains are gone and we don’t expect the sector to outperform the market going forward - the main reason to own a sector fund in the first place. For the time being we are increasing our bond allocation even though bonds are not screaming buys at current yields. We think we may see some more interesting stock fund opportunities in coming months.

May 2009 Performance Review

06/17/09 - Powerfund Portfolios Performance Review

Even after May’s 5.6% jump in the S&P 500, stocks are still pretty cheap - with a few ifs: if home prices stop falling and if the economy starts to recover in the next few months and if corporate earnings reverse course and head back to all-time highs. Of course, these are big ifs, and we think (at best) the market is going to take a breather and wait for the “green shoots” to turn into actual plants.

But What about the Fund Consumer?

06/02/09 - Powerfund Portfolios Feature Article

There's been a lot of talk about American consumers and what they'll do with their money once the dust settles. Most market analysts, economists, and prognosticators are quite certain that American consumers have fallen and simply can’t get back up. But just a few days ago, the market took off following a five-day slide, inspired by nothing more than news that the "sentiment index," one of the data points published by the Conference Board Consumer Research Center measuring the psyche of the consumer, "surged by the most in six years" in May.

April 2009 Performance Commentary

05/19/09 - Powerfund Portfolios Performance Review

Up, up, and away. You’d almost forget the economy is, at best, flat, and, at worst, is taking a pause before another plunge. (We’re in the “flat” camp incidentally.) The S&P 500 was up just shy of 10% in April, a 9.56% gain that beat the Dow’s 7.56% for the month. Small-cap stocks led the rise with a 15.46% monthly gain, while the tech-heavy Nasdaq was up a bold 12.46%. Longer-term government bonds continued to collapse off their bubble-like boom and delivered a negative 4.83% return for the month. Of course, if we get an even deeper recession the government-bond boom will likely return.

Unpopular Wisdom

05/04/09 - Powerfund Portfolios Feature Article

The recent market rally continues, but the faster stocks climb, the more our skepticism grows – not that we didn’t want stocks to rise following our trade at the end of February. If this momentum continues, we plan to cut back on stocks, particularly if mutual fund investors keep buying stock funds the way they have in recent weeks.

March 2009 Performance Review

04/17/09 - Powerfund Portfolios Performance Review

If the last six weeks in the market are any indication, the panic in the financial markets could be behind us. While getting another 25% or more out of stocks may require the economy and housing market to stop sliding, investors seem comfortable that we’ve stepped away from the precipice for now, and that apparently the drop below Dow 7,000 was panic-based. This move could be a dead cat bounce, or a suckers rally, or some other term used on Wall Street by people who incorrectly called the markets direction.

April Fool's Day

04/01/09 - Powerfund Portfolios Feature Article

They say it’s always darkest before the dawn. But then again, it’s pretty dark at 1:00 AM, too, and you still have a ways to go before the sun comes up. Let's consider a few basic financial factoids currently circulating: (1) stock markets typically recover before the economy does; (2) recessions rarely last more than a couple of years; and (3) compared to recent history, stocks are now cheap.