Interest rates jumped, creating fears the end of falling rates is finally here. This took the entire bond market down almost 2% with a bit more damage to longer-term bonds (notably government bonds) which dropped almost 7%. High yield bonds, which are sensitive to interest rates but also to rising stocks and an improving economy, were down around a half percent. 

How did we beat BOTH the stock and bond indexes in April? Many of the out-of-favor areas we hold rapidly became favorable - notably Japan and telecom (both up over 8%).  Utilities were up almost 6% AND interest rates were down again, sending our longer-term bond fund up. Best of all, commodities tanked which boosted our oil short – usually up only when stocks are down.

Wow. The S&P 500 and the Dow both reached record highs last month, each breaking previous marks set in 2007. Don’t hold your breath for a new NASDAQ record though – that’s a solid 10-20 years off (and maybe even longer than that if adjusting for inflation). 

What we’re really seeing here is the steady erosion in returns of anything other than bonds. Among the worst areas over the last five years – sporting serious negative returns of between 5 and 10% per year on average (as opposed to positive annualized returns of the same magnitude in U.S. stock funds) - are gold mining-oriented and commodities funds. Gold the metal is still higher than 5 years ago, though the yellow metal is finally showing some erosion in price and popularity.