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March 2012 Performance Review

April 2, 2012

Stocks remained strong in March. Investments considered safe havens did poorly, from bonds to precious metals. Even the market volatility measure, the VIX, slid as the stock market’s potential downside seemed to shrink. There will be no double-dip recession, and perhaps no collapse of Europe.

Even though investors optimism on US stocks continued to grow, the underperformance in what typically would do well as investors embraced risk - emerging markets - continued.

In March, our Conservative portfolio was down 0.14% while our Aggressive portfolio was up 1.30%. The benchmark Vanguard 500 (VFINX) fund delivered a 3.28% return for the month while Vanguard Total Bond Index (VBMFX) fell 0.67%. Foreign stocks, as measured by Vanguard Tax-Managed International (VTMGX), were up 0.22% for the month while emerging market stocks, as measured by Vanguard Emerging Mkts Stock Index (VEIEX), dropped 2.86%.

The best performing stock fund categories last month were Real Estate (up 4.69%), financial sector funds (up 4.46%), technology funds (up 4.44%) and healthcare sector funds (up 4.18%). The worst performers were precious metals funds (down 10.83%), energy and natural resource funds (down 4.3%), long term government bond funds (down 4%), and Latin American funds (down 3.59%).

In March (Portfolio) Madness:

Due largely to a late month plunge in oil, our long/lhort fund PowerShares DB Crude Oil Double Short (DTO) rose 8.13% in March, a return that was 4.8% better than the S&P 500 index .

Health Care Select SPDR (XLV) climbed 4.47% last month, better than the S&P 500 by 1.2%

Our mortgage bond fund Doubleline Total Return Bond (DLTNX) increased 0.41%, ahead of the bond market by 1.1% in continued great performance by this increasingly popular fund.

Investment grade bond fund Metropolitan West Total Return (MWTRX) increased 0.22% in March, outperforming the bond market by 0.9%.

Our government bond fund American Century Government Bond (CPTNX) slipped 0.40% in March, a negative return but still 0.3% better than the bond market as a whole.

Satuit Capital Micro Cap (SATMX) climbed 3.49% for the month as more speculative smaller cap stocks did well.

Investment grade bond fund American Century Core Plus (ACCNX) slipped 0.47% in March, but still beat the bond market by 0.2%.

Under-performers included:

Government bond fund Vanguard Extended Duration Treasury (EDV) sank 7.31% in March, worse than the bond market by 6.6% as interest rates rose.

PowerShares DB US Dollar Index (UUP) fell 0.23% in March, underperforming the S&P 500 by 3.5% as easing fear meant money came out of the safe US dollar.

Our international diversified fund Scout International Discovery (UMBDX) slipped 0.21%, worse than the S&P 500 by 3.5% as foreign stocks in general underperformed US markets. 

Other disappointing performers included our Europe fund Vanguard European ETF (VGK) up just 0.07% in March and our International Diversified fund Vanguard Europe Pacific ETF (VEA) which posted a slim 0.33% gain.