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. ...read the rest of this article»

Typically emerging market stocks rebound faster than the US stock market when the market heads back up (like we saw in January) but there seems to be some fears around that the emerging markets era of outperformance is waning and the US may be more insulated than faster growing markets from Europe’s ongoing troubles.  ...read the rest of this article»

The big gains in foreign markets doesn’t quite wipe out last year’s losses, but it’s a good start to the year. The bond market highlights this re-embracing of risk. Higher risk bonds topped the list in January with emerging market bond funds up around 5%, followed by high yield bonds up over 3%. The safest government bond funds were roughly flat to slightly up.  ...read the rest of this article»

For 2011 our Conservative Portfolio was up a respectable 3.5% while our Aggressive Portfolio’s winners couldn’t overtake the drag of foreign markets and financials, giving us a 0.41% loss for the year. A drop of less than one-half of one percent may compare favorably to most global portfolios (the Morningstar Global Allocation category was down about 4% for 2011), but we consider it a disappointing result. ...read the rest of this article»

October’s sharp rebound fizzled in November, and a late month rebound wasn’t enough to push the S&P 500 back into positive territory. The market’s slight dip for the month was similar to the bond market’s slip, resulting in a down November for most investment mixes.  It doesn’t seem it but the S&P 500 is up just under 1% (with dividends) for the year. Once again, foreign stocks underperformed US stocks last month. ...read the rest of this article»

One oddity of the new market environment is everything that is somewhat risky to very risky has been moving in near perfect sync - so wild swings tend to hit everything the same way, making well diversified portfolios appear quite risky. Longer term government bonds –which have limited long term appeal at current low rates, remain the best offset to sliding everything, almost always going up significantly when fears drive riskier global assets down. ...read the rest of this article»

This is how America’s fascination with foreign stock investing ends. It is also not far off from when we add some emerging market stock funds back into the Powerfund Portfolios. While the 10 year return for non-emerging foreign stock funds still beats the S&P 500, all the huge inflows into foreign funds were in the last five years, and for the last five years US stocks have been ahead. ...read the rest of this article»

Another negative month. With August’s 5.45% drop, the stock market is now down four months in a row and about 10% in total since the end of April, enough to push the market into slightly negative territory for the year (talk about the old Wall Street adage ‘sell in May and go away’). But  considering we were down about 20% top to bottom from July 22nd to the lows in August, being down ‘only’ 10% feels sort of fortunate. ...read the rest of this article»

The big news remains the government debt drama, which as of this writing appears to be over, if by over you mean pushing the bulk of the problem ahead a few months. At least government bond holders will get their money. Of course, this was never really in question. As proof look at one of the highest performing fund category last month: long term government bonds, up 4.4%. So basically when there is panic in the air, people flood to treasuries - even when the panic is OVER treasuries. ...read the rest of this article»

June was worse than May in the stock market, but a big rebound during the last few days of the month trimmed the losses to just 1.67%. Before the recent rebound investors started pulling money out of stock funds. The pattern this year has been almost inversely perfect: investors started to put money into US stock funds right before the slide started.  ...read the rest of this article»