May marked another big month for stocks, putting the S&P 500 in positive territory for the year. Largely because we lost less on the way down and did some buying in March, all of our model portfolios are well ahead of the S&P 500 in 2009, except one, Daredevil.
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.
Longer-term government bonds continued to slide as investors started worrying more about inflation and less about not getting paid back at all. Junk bonds enjoyed another positive month as investors focused on the big yields more than the big risks in higher yield bonds.
May shows Bill Gross’ move into higher risk debt is alive and well, with a 3.57% return for the month for Harbor Bond (HABDX). Keep in mind government bonds were down in May, and the total bond market index was flat. We wouldn’t be surprised if he cuts back the risk at some point if this keeps up.
Nakoma Absolute Return (NARFX) turned April’s poor showing around with a 1.38% rise. It will be hard for this fund to take off relative to the market without another drop in the S&P 500, or better, a sharp drop relative to the market in consumer discretionary stocks. We expect such a drop in too-soon-for-a-recovery consumer stocks.
Healthcare stocks did well but were no financials. Health Care Select SPDR (XLV) was up 6.82% in May, slightly ahead of the broader market.
Janus Global Research (JARFX) had another great month. If this keeps up the fund will recover its big losses of last year. For May, the fund was up 9.95% and is now down ‘just’ 31.46% over the last year, only slightly worse than the market. This in itself is remarkable considering the fund is up 36.52% over the last three months – more than any major index. Keep in mind this fund was killing the market before the crash, and apparently is doing so again. This will likely not be a good fund if the market sinks anew.
Junk bonds remain a great recovery play with a sharp 6.58% climb in Metropolitan West High Yield (MWHYX). The great junk bond recovery is moving a little too fast.
The Financial Sector ETF posted another huge month. In May the fund climbed about 14% for a 62.46% return since we bought it just three months ago. Last month we said financial stocks will perform no better than the S&P 500 given the run-up, now we think they will underperform slightly and we are looking to cut back. Only short term momentum is keeping this fund on top.
The Aggressive Portfolio jumped 5.65% in May.
May marked another big month for stocks, putting the S&P 500 in positive territory for the year. Largely because we lost less on the way down and did some buying in March, all of our model portfolios are well ahead of the S&P 500 in 2009, except one, Daredevil.
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.
Longer-term government bonds continued to slide as investors started worrying more about inflation and less about not getting paid back at all. Junk bonds enjoyed another positive month as investors focused on the big yields more than the big risks in higher yield bonds.
Nakoma Absolute Return (NARFX) turned April’s poor showing around with a 1.38% rise. It will be hard for this fund to take off relative to the market without another drop in the S&P 500, or better, a sharp drop relative to the market in consumer discretionary stocks. We expect such a drop in too-soon-for-a-recovery consumer stocks.
The Japanese market has been recovering nicely and is outpacing the U.S. market on the way up now. The Nikkei recently broke through 10,000 (don’t hold your breath for the old bubble high near 40,000). Vanguard Pacific Stock ETF (VPL) was up near 12% with a 34% three-month return. We’re actually up since we bought back into Japan seven months ago, which was a little too early.
Healthcare stocks did well but were no financials. Health Care Select SPDR (XLV) was up 6.82% in May, slightly ahead of the broader market.
May shows Bill Gross’ move into higher risk debt is alive and well, with a 3.57% return for the month for Harbor Bond (HABDX). Keep in mind government bonds were down in May, and the total bond market index was flat. We wouldn’t be surprised if he cuts back the risk at some point if this keeps up.
Biotech continues to trail the market. SPDR Biotech (XBI) ETF was up 3.71%. The main benefit here is that if these recently hot stocks turn south again, biotech will likely be one of the only high-risk areas that doesn’t collapse – much like 2008.
Janus Global Research (JARFX) had another great month. If this keeps up the fund will recover its big losses of last year. For May, the fund was up 9.95% and is now down ‘just’ 31.46% over the last year, only slightly worse than the market. This in itself is remarkable considering the fund is up 36.52% over the last three months – more than any major index. Keep in mind this fund was killing the market before the crash, and apparently is doing so again. This will likely not be a good fund if the market sinks anew.
The Financial Sector ETF posted another huge month. In May the fund climbed about 14% for a 62.46% return since we bought it just three months ago. Last month we said financial stocks will perform no better than the S&P 500 given the run-up, now we think they will underperform slightly and we are looking to cut back. Only short term momentum is keeping this fund on top.
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The Conservative Portfolio jumped 4.02% in May.
May marked another big month for stocks, putting the S&P 500 in positive territory for the year. Largely because we lost less on the way down and did some buying in March, all of our model portfolios are well ahead of the S&P 500 in 2009, except one, Daredevil.
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.
Longer-term government bonds continued to slide as investors started worrying more about inflation and less about not getting paid back at all. Junk bonds enjoyed another positive month as investors focused on the big yields more than the big risks in higher yield bonds.
May shows Bill Gross’ move into higher risk debt is alive and well, with a 3.57% return for the month for Harbor Bond (HABDX). Keep in mind government bonds were down in May, and the total bond market index was flat. We wouldn’t be surprised if he cuts back the risk at some point if this keeps up.
Nakoma Absolute Return (NARFX) turned April’s poor showing around with a 1.38% rise. It will be hard for this fund to take off relative to the market without another drop in the S&P 500, or better, a sharp drop relative to the market in consumer discretionary stocks. We expect such a drop in too-soon-for-a-recovery consumer stocks.
Healthcare stocks did well but were no financials. Health Care Select SPDR (XLV) was up 6.82% in May, slightly ahead of the broader market.
Janus Global Research (JARFX) had another great month. If this keeps up the fund will recover its big losses of last year. For May, the fund was up 9.95% and is now down ‘just’ 31.46% over the last year, only slightly worse than the market. This in itself is remarkable considering the fund is up 36.52% over the last three months – more than any major index. Keep in mind this fund was killing the market before the crash, and apparently is doing so again. This will likely not be a good fund if the market sinks anew.
Junk bonds remain a great recovery play with a sharp 6.58% climb in Metropolitan West High Yield (MWHYX). The great junk bond recovery is moving a little too fast.
The Financial Sector ETF posted another huge month. In May the fund climbed about 14% for a 62.46% return since we bought it just three months ago. Last month we said financial stocks will perform no better than the S&P 500 given the run-up, now we think they will underperform slightly and we are looking to cut back. Only short term momentum is keeping this fund on top.
The Aggressive Portfolio jumped 5.65% in May.
May marked another big month for stocks, putting the S&P 500 in positive territory for the year. Largely because we lost less on the way down and did some buying in March, all of our model portfolios are well ahead of the S&P 500 in 2009, except one, Daredevil.
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.
Longer-term government bonds continued to slide as investors started worrying more about inflation and less about not getting paid back at all. Junk bonds enjoyed another positive month as investors focused on the big yields more than the big risks in higher yield bonds.
Nakoma Absolute Return (NARFX) turned April’s poor showing around with a 1.38% rise. It will be hard for this fund to take off relative to the market without another drop in the S&P 500, or better, a sharp drop relative to the market in consumer discretionary stocks. We expect such a drop in too-soon-for-a-recovery consumer stocks.
The Japanese market has been recovering nicely and is outpacing the U.S. market on the way up now. The Nikkei recently broke through 10,000 (don’t hold your breath for the old bubble high near 40,000). Vanguard Pacific Stock ETF (VPL) was up near 12% with a 34% three-month return. We’re actually up since we bought back into Japan seven months ago, which was a little too early.
Healthcare stocks did well but were no financials. Health Care Select SPDR (XLV) was up 6.82% in May, slightly ahead of the broader market.
May shows Bill Gross’ move into higher risk debt is alive and well, with a 3.57% return for the month for Harbor Bond (HABDX). Keep in mind government bonds were down in May, and the total bond market index was flat. We wouldn’t be surprised if he cuts back the risk at some point if this keeps up.
Biotech continues to trail the market. SPDR Biotech (XBI) ETF was up 3.71%. The main benefit here is that if these recently hot stocks turn south again, biotech will likely be one of the only high-risk areas that doesn’t collapse – much like 2008.
Janus Global Research (JARFX) had another great month. If this keeps up the fund will recover its big losses of last year. For May, the fund was up 9.95% and is now down ‘just’ 31.46% over the last year, only slightly worse than the market. This in itself is remarkable considering the fund is up 36.52% over the last three months – more than any major index. Keep in mind this fund was killing the market before the crash, and apparently is doing so again. This will likely not be a good fund if the market sinks anew.
The Financial Sector ETF posted another huge month. In May the fund climbed about 14% for a 62.46% return since we bought it just three months ago. Last month we said financial stocks will perform no better than the S&P 500 given the run-up, now we think they will underperform slightly and we are looking to cut back. Only short term momentum is keeping this fund on top.