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NOVEMBER 2013 PERFORMANCE REVIEW

2013 is turning out to be among the best calendar years for stocks ever. With November’s 3% rise in the S&P 500, we’re now up almost 29% for the year. But the excitement was mostly in U.S. stocks. Bonds sunk slightly and emerging market stocks dropped just over 2%. Larger foreign stocks also underperformed, up less than 1%. 

Big and Tall?

As the stock market continues to rise, we hear experts claiming stocks are not that expensive compared to bonds. They cite modest P/E ratios and record earnings. While the P/E ratio of the market (looking at real earnings, not future expected earnings) is far from a historical bargain, it has been pricier in the past. 

October 2013 Performance Review

In October stocks went back to their old tricks and treats…see-sawing up and down on scary financial news but ultimately ending with a big gain. As the specter of global calamity resulting from a shutdown and defaulting U.S. Government fell to the wayside (at least for a few months…) the stock market sprang back to life, and is now up for the year about as much as the entire year of 2008 – a major rebound year for stocks after a sharp slide.

Debt Fight at the (not so) O.K. Corral

The economy and markets are heavily influenced by purely psychological factors. People spend or invest based on fear, optimism, and expectations for the future. Consumers and investors make decisions based on tangible factors like wage growth and tax rate changes, but they're also surprisingly motivated by fluctuating optimism. It's entirely possible that most booms and busts are largely caused by swinging collective expectations.

September 2013 Performance Review

September’s portfolio performance was not expected - in what was a strong market for stocks our Aggressive portfolio beat the market, and Conservative portfolio came pretty close.

Too Much of a Good Thing

We run a huge mega-database each month to calculate things like our MAXratings and to identify the most attractive (generally less popular) investment areas. In addition to our regular calculations, we also look at composite performance data. Each time we  evaluate the thousands of open-end funds vs. hundreds of ETFs,  the average mutual fund beats the average ETF. The ETFs are cheaper, and most have less turnover. Why is this?

August 2013 Performance Review

Stocks and bonds sunk in August, which makes it difficult for a portfolio made up of both to perform well. Of all the things investors worry about, the high correlation of all asset classes is the most distressing, and most likely.

Trade Alert

We executed a trade in both the Conservative and Aggressive Powerfund Portfolios on August 15th, 2013. 

Trades in Both Portfolios

Stocks have been going great guns since we hit the bottom of the financial meltdown in March 2009. We generally try to increase our stock allocation on the way down and cut back on stocks as they climb and investors grow more optimistic.

July 2013 Performance Review

The June Swoon proved temporary as stocks rebounded to new highs in July. Even previously lackluster foreign stocks joined the party as both U.S. and foreign larger stocks rose just over 5%. Emerging market stocks weren’t in a festive mood though – they continued to underperform returning less than 1% in July. Bonds were mostly flat after sliding in recent months.